REG - Dar Global PLC - Dar Global Half Year 2024 Results
26/09/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240926:nRSZ7026Fa&default-theme=true
RNS Number : 7026F Dar Global PLC 26 September 2024
Dar Global PLC
(Incorporate in England and Wales)
Company Number: 14388348
ISIN: GB00BQXNJY41
LEI: 213800XRFXQ1KEWACW80
26 September 2024
DAR GLOBAL PLC ('Dar Global', or the 'Company', or the 'Group')
Half-year results for the six-month period ended 30 June 2024
Balance sheet strength anchors growth opportunities
Dar Global, the luxury international real estate developer, today announces
its unaudited interim results for the six months ended 30 June 2024.
Ziad El Chaar, Chief Executive, commented:
"We have had a promising start to the year as Dar Global continued to deliver
luxury real estate developments for our affluent clientele across the globe.
Demand for our newly launched and existing products has remained strong with
cumulative sales totalling nearly US$1.3 billion (2023 H1: c. US$0.8 billion).
"During this period, we announced several exciting new partnerships. In June
we launched our Astera beachfront residences, situated on Al Marjan island in
Ras Al Khaimah, UAE. This will be the first project in the GCC region for
British luxury car maker Aston Martin and we have already seen high levels of
interest for these units. The Astera marks our third partnership with luxury
supercar brands, having launched Tierra Viva in conjunction with Automobili
Lamborghini last year and nearing completion on the Da Vinci Tower in Dubai
with Pagani.
"The AIDA masterplan is progressing well with the launch of the Marriott
Residences and Trump Villas this year, further positioning Oman as an emerging
player and prime destination in the region. Contributing to over 50% of Dar
Global's total GDV, we are on track to complete construction of Phase I of
AIDA in 2027. The launch of the Trump International Hotel within the AIDA
development was followed by a number of other announcements, including plans
for two additional projects, the Trump Tower in Jeddah, Saudi Arabia, and the
Trump Tower in Dubai.
"Overall, as expected, revenue and profitability for the first half of this
year were subdued as some of our early stage developments approach revenue
recognition milestones. As these milestones are met we expect the second half
of 2024 and full year 2025 to be positively impacted as a result. We are
pleased to therefore reiterate our target of delivering at least US$700
million of revenue in aggregate across FY 2024 and FY 2025 whilst maintaining
a similar sales rate and overall EBITDA margin to what was delivered in FY
2023. Our current revenue expectation for FY 2024, as we approach these
milestones, is in the range of US$210 million and US$250 million.
"As we look ahead, the business is in a robust financial position to execute
on its expansion strategy. We are pleased to have announced our recent
appointment of Rothschild & Co. with a focus on Saudi and London markets."
Financial Highlights
· Revenue for the period at US$44.5 million (HY 2023: US$108.4
million) with a gross profit of US$14.6 million (HY 2023: US$45.7 million)
· Loss for the period at US$12.8 million (HY 2023: Profit of
US$20.8 million)
· Portfolio GDV increased to US$6.8 billion as of 30 June 2024
across 14 active projects (31 December 2023: 12 active projects with GDV of
US$5.9 billion)
· Robust demand for newly launched and existing projects with
cumulative contracted sales rising to 1,797 units as of 30 June 2024,
resulting in total sales value of c. US$1.3 billion (c. 19% of the total
portfolio GDV of US$6.8 billion and close to 50% of total launched GDV of c.
US$2.6 billion)
· Strong balance sheet and liquidity position with cash
balances of US$335.5 million, comprising free cash of c. US$126.9 million, and
restricted escrow cash of US$208.6 million (includes escrow retention US$10.4
million)
· Net asset value of US$451.9 million at 30 June 2024
(US$465.4 million at 31 December 2023)
· Total available liquidity of c. US$170.4 million at 30
June 2024 (including undrawn debt facilities), providing a platform to pursue
opportunistic growth and expand the current portfolio of assets
· Since the period end, Dar Global secured additional growth
capital of up to US$275 million with plans to use the proceeds for investment
in new projects across several countries specifically targeted as part of its
strategic growth plans.
Half year summary financials:
Summary Profit & Loss HY 2024 (US$M) HY 2023 (US$M) Change (%)
Unaudited Unaudited
Revenue 44.5 108.4 -59%
Gross profit 14.6 45.7 -68%
Gross profit margin 33% 42% -
EBITDA (8.3) 22.5 -137%
EBITDA margin - 21% -
(Loss)/ Profit for the period (12.8) 20.8 -162%
Summary Financial Position As of 30 June 2024 (US$M) Unaudited As of 31 December 2023 (US$M) Change (US$M)
Assets
Cash and cash equivalents 1 325.1 228.5 +96.6
Trade and unbilled receivables 249.1 221.9 +27.2
Advances, deposits and other receivables 67.7 60.9 +6.8
Development properties 265.8 216.9 +48.9
Liabilities
Trade and other payables 34.7 25.7 +9.0
Advance from customers 108.2 57.5 +50.7
Loans and borrowings 234.0 125.4 +108.6
Development property liabilities 119.4 78.6 +40.8
Equity
Net asset value 451.9 465.4 -13.5
Net asset value per share (in US$) 2.5 2.6 -0.1
( )
Highlights during the period
· In April 2024, Dar Global announced its partnership with British
luxury carmaker Aston Martin to deliver stunning beachfront residences on Al
Marjan island in Ras Al Khaimah, UAE. This will be Aston Martin's entry into
the GCC market, building on its successful brand collaborations in the United
States and Japan.
· In June, Dar Global unveiled The Astera, interiors by Aston Martin,
a beachfront development with an expected GDV of c. US$238 million. Positioned
in a pristine location near the highly anticipated Wynn Resort on Al Marjan
island, this project is expected to be completed by December 2028.
· The Company announced its second hospitality project with the launch
of the Trump International Hotel, Oman. Located within the AIDA masterplan,
this luxurious 140-key, 5-star hotel complex will feature a range of
accommodations, including hanging suites, furnished villas and serviced
apartments. It is the latest addition to The Trump Organization's prestigious
global portfolio.
· Dar Global acquired a lagoon with an approximate size of 37 hectares
at a location north of Male in the Maldives, to develop the first Dolce &
Gabbana resort globally. The project is currently in its design stage with
designers from Dar Global and Dolce & Gabbana collaborating on the
masterplan.
· Earlier this year, the Company acquired three adjoining plots of
land for the development of residential villas within the Jumeirah Golf Estate
in Dubai, UAE. This represents the Company's sixth project in the UAE and adds
c. US$310 million to its total GDV.
· The Company announced plans for the development of two additional
towers, the Trump Tower in Jeddah, Saudi Arabia and the Trump Tower in Dubai,
UAE.
· In August, Dar Global appointed Rothschild & Co. to explore
further growth opportunities in the London and Saudi Arabian markets. This
move is part of the Company's strategic plan to expand its presence in the two
markets.
About Dar Global
Dar Global PLC is a highly differentiated international real estate business.
It focuses predominantly on developing real estate projects comprising second
and vacation homes for internationally mobile customers, in some of the most
desirable locations across the Middle East and Europe, including downtown
Dubai, Muscat in Oman, London and the Costa del Sol region in the South of
Spain.
Dar Global was originally established to house and develop the international
assets of Dar Al Arkan Real Estate Development PJSC ("DAARE"), a leading real
estate developer in the Kingdom of Saudi Arabia. Listed on the Saudi Stock
Exchange since 2007, Dar Al Arkan has delivered over 15,000 residential units
with total assets of c. US$9 billion.
The Company intends to expand its focus to hospitality assets. The aim is to
acquire or build hotels and sell them after a period of three to five years of
operation once the hotels or resorts' revenue streams stabilise. Target
markets include Spain, Dubai, Maldives, Athens, Saudi Arabia and London.
Dar Global was admitted to the Main Market of the London Stock Exchange on 28
February 2023.
Please visit www.DarGlobal.co.uk (http://www.DarGlobal.co.uk)
Market abuse regulation information
The information contained in this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the Market
Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement, this inside information is now considered to be in the public
domain. Sodali & Co. is responsible for the release of this announcement
for the purposes of such regulation.
For further information, please contact:
Dar Global
Abhilash Paul, Head of Investor Relations +44 (0) 20 8156 5573
apaul@darglobal.co.uk
ir@darglobal.co.uk (mailto:ir@darglobal.co.uk)
Sodali & Co. +44 (0) 20 7250 1446
Justin Griffiths / Louisa Henry darglobal@sodali.com (mailto:darglobal@sodali.com)
Company Secretary
Company Matters
6(th) Floor, 65 Gresham Street, London EC2V 7NQ
Management Presentation
The Company's half year results presentation will be available on the Investor
Relations section of Dar Global's website (https://darglobal.co.uk/investor/
(https://darglobal.co.uk/investor/) ) shortly after 7:00am on 26 September
2024.
Chief Executive's Review
At Dar Global, our strategic priorities remain firmly focused on sustainable
growth and long-term value creation, underpinned by our balance sheet strength
and disciplined capital management. Our commitment to expanding within the
luxury real estate market, particularly in the vacation and second homes
segment, has seen our portfolio grow to 14 active projects across the GCC,
Europe, and the United Kingdom, with a Gross Development Value (GDV) of US$6.8
billion, up by US$1.8 billion from a year ago.
In line with our capital-efficient strategy, we continue to leverage joint
development agreements (JDAs) and other innovative financing structures. These
initiatives have allowed us to optimise our financial resources while driving
expansion into new markets, such as Ras Al Khaimah in the UAE. We continue to
experience strong buyer demand across our global offerings, with contracted
sales reaching 1,797 units by mid-year, amounting to a total sales value of
approximately US$1.3 billion (2023 H1: c. US$0.8 billion).
In the first half of 2024, we successfully launched several new projects and
partnerships, including our exciting collaboration with British luxury brand
Aston Martin and the launch of The Astera, marking our entry into Ras Al
Khaimah - a market that has seen significant growth in real estate investment.
Additionally, we expanded into the hospitality sector with the launch of the
Trump International Hotel, part of our AIDA masterplan in Oman. AIDA continues
to attract a global clientele, with this year seeing the launch of Marriott
Residences and Trump Villas, further positioning Oman as an emerging player in
the regional and global real estate investment landscape. Our portfolio
growth, combined with a strong liquidity position, highlights our resilience
and readiness to seize future expansion opportunities.
Looking ahead, we remain focused on exploring strategic opportunities in both
existing and new markets. Our recent appointment of Rothschild & Co. to
evaluate further growth avenues underscores our proactive and considered
approach to expanding our geographical footprint while remaining aligned with
our long-term vision.
As we continue to execute our strategy, we are confident in our ability to
navigate the current environment and deliver sustainable value to our
shareholders. We look forward to sharing more milestones with our stakeholders
in the months ahead.
Business Performance and Project Update
Dar Global has continued to make steady progress during the first half of
2024, delivering portfolio growth. While macroeconomic factors continue to
present challenges, the Company has sustained growth and maintained solid
sales momentum across its active projects. Our measured approach to investment
decisions remains a key pillar of our strategy as we position ourselves for
long-term success.
The Company is pleased to provide an update on the status of its development
projects for the first half of 2024.
UAE - Six active projects
We have seen continued strength in Dubai's residential market, where average
property prices have increased by over 12.5% in the first half of 2024 with
both villas and apartments seeing robust demand. According to CBRE
research 2 , average apartment and villa prices reached, respectively, AED
1,561 and AED 1,896 per square foot as at June 2024.
In the first half of 2024, a total of 73,618 residential transactions were
registered in Dubai, marking a 27.6% increase from last year and setting a new
record for this period of the year. This increase was driven by a 41% increase
in off-plan sales with secondary market sales rising by 8.2%.
Sales volumes of residential properties above AED 5 million (equivalent to
US$1.4 million) and AED 10 million (equivalent to US$2.7 million) also
continued to see an increase, coming in at 5,727 units (+22.5% yoy) and 2,014
units (+41.5% yoy) respectively, in the first half of the year. Off-plan sales
supported these activity levels, accounting for over 63% of total transactions
in both market segments.
CBRE expects Dubai's residential market to remain strong in the second half of
the year with prices continuing to rise, with the rate of increase moderating,
particularly as the market has started showing some signs of stabilisation.
Urban Oasis Tower - The Urban Oasis Tower is a 34-storey residential
development located on the Dubai Canal, featuring bespoke apartments with
interiors designed in collaboration with Missoni, the Italian fashion
designer. Construction at this project was completed in H1 2024 with clients
currently moving into their new homes. Urban Oasis represents Dar Global's
first completed project thus underlining our ability to successfully execute
large projects.
Da Vinci Tower by Pagani - The refurbishment of the Da Vinci Tower project, in
partnership with Italian supercar brand Pagani, is expected to be fully
completed by December 2024 with works progressing as per our planned schedule.
W Residences - The W Residences project in downtown Dubai was launched in
early 2022 and fully sold out shortly after its public launch. Construction
works continue on-site and is expected to be completed in Q2 2026.
DG1 - DG1 is Dar Global's first 'own-brand' development, which was launched in
March 2023. This 20-storey tower will comprise 223 units, including one, two,
and three-bedroom apartments and Dar Global has partnered with Gensler
Architects on the design of the tower. The launch of Dar Global's signature
brand with DG1 created a new benchmark in Dubai's luxury living space, making
it a highly desirable asset. Shoring and piling works at the site have been
completed and the main contractor is expected to be appointed in the second
half of 2024. The project is expected to complete in Q4 2026.
The Astera - Dar Global unveiled The Astera, interiors by Aston Martin, in
June 2024. This exquisite beachfront residential development will include one
and two-bedroom apartments as well as three-bedroom beach villas. It is
located on Al Marjan island, a man-made island on the coast of Ras Al Khaimah
in the UAE and will be in close proximity to the highly anticipated Wynn
Resort.
The Astera represents Dar Global's first collaboration with iconic British
sports car manufacturer - a partnership that was launched earlier this year.
With a total GDV of c. US$238 million, this project will be the first time
Aston Martin's internationally acclaimed interior design will be available in
the GCC region. The project has seen robust client demand since its launch and
is expected to complete by December 2028.
Jumeirah Golf Estate - This luxury villa community will be built over an area
of c. one million sqft. within the Jumeirah Golf Estate, which was acquired by
Dar Global in H1 this year.
Qatar - One active project comprising of five residential buildings
Qatar's housing market has continued to recover in 2024 as we see strong
underlying demand for buildings with higher specifications in prime locations,
especially in Doha.
According to the latest statistics released by the Planning and Statistics
Authority in Qatar, the total number of residential transactions increased by
16.4% over the first five months of this year compared to 2023. Transactional
activity remains 44% lower than the record levels seen in 2021, following the
introduction of new laws governing property ownership in the country.
The sales market continues to be dominated by owner-occupiers rather than
investors, with apartment sales being driven by residents looking to secure
residential permits and avoid paying rents. Buyers are also being encouraged
by the increasing flexibility of structured payment plans provided by off-plan
sales programs in the market.
Les Vagues - The Les Vagues project is the first ever residential project in
Qatar with interiors designed by world renowned fashion icon, Elie Saab. This
project is located on the Qetaifan Island within Lusail and features 303
opulent sea-front residences of one, two and three-bedroom apartments. In the
first half of 2024, Dar Global appointed renowned contractor Shelter Qatar WLL
as the main contractor for this project and construction is expected to be
complete by Q1 2027.
Oman - A master plan comprising of a Trump branded golf course, a club house,
residential units and hotels
The Omani real estate market continues its growth trajectory in 2024.
According to the National Centre for Statistics (NCSI) in Oman, the total
value of real estate transactions increased by 6.4% to US$4.47 billion in the
first seven months of 2024, when compared to the same period in 2023. The
increase in property values was driven by a rise in both cash sales as well as
mortgage contracts.
Hamptons International Oman 3 highlights a surge within Muscat's real estate
market, particularly for residential properties with, luxury waterfront
properties in high demand. This segment is projected to further expand at an
annual rate of 3.7% from 2024 to 2029, potentially reaching a market volume of
US$358 billion by 2029.
Buyers increasingly favour modern, luxurious properties with high-quality
amenities such as landscaped gardens, swimming pools, and state-of-the-art
gyms. There is also a growing demand for properties in prime locations, close
to commercial, retail, and entertainment hubs
Several factors are driving the growth of Oman's real estate market.
Government initiatives to attract foreign investment such as relaxing property
ownership laws for foreigners have been pivotal. Investments in infrastructure
projects, including new roads and airports, have further enhanced the market's
appeal.
Oman's stable political environment and strategic economic diversification,
moving away from reliance on oil, have attracted both domestic and
international investors. Relatively stable interest rates and favourable
mortgage terms have made property purchases more accessible, boosting market
demand.
AIDA - The AIDA project in Oman is a 4.4 million sqm mixed-use development on
the clifftops outside Muscat. It represents c. 50% of Dar Global's total GDV
and is expected to be developed in a phased manner over the next 8-10 years.
The project is being developed sustainably, preserving the area's topography
and unique environmental features. This project is being developed in
partnership with the OMRAN GROUP (Oman Tourism Development Company) and the
Trump Organisation.
Major developments at AIDA during the first half of 2024 included:
· Acquisition of c. 1 million sqm of additional land in the
location, increasing the total land area of the project to c. 4.4 million sqm
with exclusive beach access. The Company doesn't expect any impact on the
overall profitability of the project from this acquisition as the expected
higher value of the additional units will compensate for value of the land
acquisition.
· Appointment of Oman Shapoorji as the infrastructure contractor
for Phase I of the AIDA masterplan, under a two-year contract.
· The Trump International Golf course within AIDA has been upgraded
to a championship course, making it longer, more challenging and designed for
competitive play. The course will be designed to host major professional golf
tournaments, further boosting Oman's image as a major regional destination.
· Launch of several mixed-use developments within AIDA including
the Trump International Hotel, Oman - encompassing a luxury hotel, hanging
suites with stunning views, furnished residences and cliff villas, a
members-only club and the Clift night club. Other properties include the
Fairway villas and Trump golf villas, both of which include exclusive access
and membership of the golf club. The Marriot residences in AIDA is a branded
residence complex and The Great Escape comprises of one-, two- and
three-bedroom apartments.
United Kingdom - Prime Central London
London's luxury housing market remained resilient during the first half of
2024, despite some uncertainty in the run up to July's general election.
Some prime buyers adopted a wait-and-see approach until the results of the
election were known. We expect to see robust buyer demand over the Autumn,
once most of the uncertainty is behind us.
Data from Savills found that prices in prime central London adjusted
marginally by -0.4% in the three months to the end of June, and by -0.9% over
the past year. The impact of non-dom tax changes is likely to be most felt in
prime central London.
At present, there is little evidence to suggest we'll see a flurry of stock
coming onto the market, as many look to retain their base in the Capital. In
addition, most prime central London buyers, and indeed sellers, do not have
non-dom status and demand from domestic and other international purchasers
continues to be resilient, partly because of the value on offer in a
historical context. According to Savills, prices across prime central London
remain 19% down on their previous peak a decade ago.
The Mulliner - Situated on the corner of Old Park Lane and Piccadilly,
overlooking Green Park, The Mulliner at 149 Old Park Lane is a sophisticated
landmark building with an important role in London's architectural heritage.
Refurbishment work was completed in Q1 this year and the property has garnered
significant buyer interest since.
Albert Hall Mansions - In H1 2024, Dar Global commenced design works on its c.
7,000 sqft. unit in Albert Hall Mansion overlooking Hyde Park in London. It is
being refurbished and upgraded to exceptional luxury standards, with interiors
designed in collaboration with a European ultra-luxury fashion brand.
Oh So Close - Located in the leafy community of West Ealing in London, this
project comprises of two three storey houses converted into 17 luxury flats.
Construction of this project has progressed and is expected to complete in Q4
2024.
8mins-to-Central - Situated in Ealing, only minutes from central London on the
new Elizabeth underground line, this is a low-rise building housing nine
meticulously designed apartment. Construction of this project is expected to
complete in Q4 2024.
Spain - Two active projects and one sizeable land parcel across the south of
Spain
So far in 2024, the real estate market across Costa del Sol has seen steady
growth. Notably, certain areas of Marbella are experiencing an upward
trajectory in property prices, especially within the luxury / high-end
segment, this trend is indicative of Marbella's enduring appeal as a prime
destination for affluent buyers seeking exclusive residences.
Marbella saw a record number of tourist arrivals last year and is expected to
break that record in 2024. The whole of Costa del Sol also celebrated 2023 as
"the best tourist year" in its history, with 14 million arrivals, marking a
9.4% increase over 2022 and surpassing the previous record set in 2019. 2024
is continuing to set records with an 18% increase in the first four months of
the year compared with 2023. In the first half of 2024, Malaga airport saw an
increase in passengers of one and a half million more than the same period
last year and exceeded the 11 million passenger mark within a six-month
timeframe for the first time ever.
The area continues to attract foreign investment with British, Dutch and
Swedish nationals representing the top foreign buyers of homes in the province
of Malaga, contributing to a third of all property acquisitions in the area,
according to Panorama Properties. This demand has also been largely agnostic
to the prevailing higher interest rates, with less than 10% of property
purchases made using mortgages in Marbella's luxury end of the market (defined
as properties with selling prices greater than €2 million).
Tierra Viva - In June 2023, Dar Global launched this ultra-luxury project
comprising of 53 exclusive villas, designed in collaboration with Automobili
Lamborghini. Construction of this project commenced late last year and
infrastructure works are expected to begin in late Q3 2024. The project is
expected to complete in Q4 2027.
Manilva (Tabano) - In September 2022, Dar Global acquired six plots of land in
the municipality of Manilva in the province of Malaga on the border with the
province of Cadiz in southern Spain. The plots are located approximately 45
minutes from Marbella by car and are close to several polo clubs and one of
the best beach areas of Costa del Sol. The total land area of the Tabano
project is 4,650,092 sqm.
Marea, interiors by Missoni - This project is located in one of the most
sought-after enclaves of the Andalusian coast, not far from the Finca Cortesin
resort which has an 18-hole championship golf course and is rated among
Spain's best golf courses. Construction is expected to commence in Q1 2025 and
the project is due to complete in Q2 2027.
Strong Balance Sheet & Net Cash Position
Dar Global boasts a resilient balance sheet, underpinned by a cash position of
US$335.5 million (including free cash of US$126.9 million, and restricted cash
of US$198.2 million and escrow and escrow retentions of US$ 10.4 million). The
Company also has a conservative debt to equity ratio of c. 0.52x. This
positions the Company to strategically capitalize on current market
conditions. Amidst the prevailing macro-economic uncertainties that have
dampened the broader residential real estate sector, Dar Global's capital
light model enables the Company to adopt an opportunistic approach. This
encompasses exploration of potential transactions such as targeted asset
acquisitions, refurbishment projects, acquisition of distressed assets,
synergistic joint ventures, acquiring land banks, and other investments across
the geographical expanse where the Company currently operates.
Outlook and Guidance
During the first half of 2024, we have seen continuing growth in our business
and activities, including good progress on the projects currently under
construction, and the appointment of main contractors for both Les Vagues
(building 1) and AIDA Phase 1. In line with our stated accounting policy,
revenue recognition for sold units at a number of our GCC projects is
dependent on achieving certain construction milestones. During H1 2024,
revenue was solely derived from projects that had achieved recognition
milestones in previous years (W Residences, Urban Oasis and Da Vinci Tower).
Despite strong ongoing sales for other key projects, including Les Vagues
(building 1) and AIDA Phase 1, revenue has not been recognised in H1 2024 as
these projects did not yet meet the construction milestones to enable
revenue recognition to commence. We expect some of these new projects to
achieve the required construction milestones during the second half of this
year, allowing revenue to be recognised for these sold units in accordance
with our revenue recognition policy.
Dar Global reiterates its target to deliver at least US$700 million of revenue
in aggregate across the next two financial years (FY 2024 and FY 2025), while
maintaining a similar sales rate and overall EBITDA margin to what was
delivered in FY 2023. We expect FY 2025 to be positively impacted by a larger
weighting of our target revenue, with three new projects expected to achieve
key construction milestones between H2 2024 and H1 2025. Our current revenue
expectation for FY 2024 is in the range of US$ 210 million and US$ 250
million.
Continued Expansion:
With a robust financial position, Dar Global is well positioned to further
expand its geographical presence. While remaining dedicated to grow within
existing markets, as demonstrated by the Rothschild & Co. mandate on
transactions in London and Saudi Arabia, the Company is constantly evaluating
opportunities to expand into new regions.
The Company continues to push forward with its ambitious plans, expanding its
presence with its strong cash position, we look forward to sharing updates
with our stakeholders on our key milestones.
Cautionary statement regarding forward-looking statements
This release may include statements that are, or may be deemed to be,
'forward-looking statements'. These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
'believes', 'estimates', 'plans', 'projects', 'anticipates', 'expects',
'intends', 'may', 'will' or 'should' or, in each case, their negative or other
variations or comparable terminology, or by discussions of strategy, plans,
objectives, goals, future events or intentions. These forward-looking
statements include all matters that are not historical facts. They appear in a
number of places throughout this release and include, but are not limited to,
statements regarding the Group's intentions, beliefs or current expectations
concerning, among other things, the Group's results of operations, financial
position, liquidity, prospects, growth, strategies and expectations of the
industry.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances. Forward-looking
statements are not guarantees of future performance and the development of the
markets and the industry in which the Group operates may differ materially
from those described in, or suggested by, any forward-looking statements
contained in this release. In addition, even if the development of the markets
and the industry in which the Group operates are consistent with the
forward-looking statements contained in this release, those developments may
not be indicative of developments in subsequent periods. A number of factors
could cause developments to differ materially from those expressed or implied
by the forward-looking statements including, without limitation, general
economic and business conditions, industry trends, competition, commodity
prices, changes in law or regulation, changes in its business strategy,
political and economic uncertainty. Save as required by the Listing and
Disclosure Guidance and Transparency Rules, the Company is under no obligation
to update the information contained in this release. Past performance cannot
be relied on as a guide to future performance.
Going concern statement
The Board of Directors conducted an evaluation of the Group's business plan
and its anticipated funding needs for the medium-term, comparing them to the
level of committed loan facilities and existing cash reserves. As of 30 June
2024, the Group holds unrestricted cash balance of US$126.9 million and total
liquidity of US$170.4 million (including undrawn debt facilities).
Additionally, the Group will receive funds from customers for units sold, as
per contracted payment plans and from sales of unsold units.
Throughout this assessment, we have considered the inherent uncertainties
associated with future financial projections. Where applicable, we have
applied severe yet plausible sensitivities to the key factors impacting the
Group's financial performance.
Based on this evaluation, the Directors hold a reasonable expectation that the
Group possesses ample resources to sustain its operations for the foreseeable
future, extending no less than 12 months from the date of these Condensed
Consolidated Interim Financial Statements. Therefore, they have opted to
continue using the going concern basis of accounting when preparing the
Group's Condensed Consolidated Interim Financial Statements.
Principal risks and uncertainties
The principal business risks and uncertainties facing Dar Global for the next
six months are:
· Property market cycles and interest rates
· Contractor ability to deliver quality on time and within
budget
· Political uncertainties which could impact our customers'
appetite for investment in properties
· Multi-party legal risks in joint venture projects for
branded units
· Labour standards and health & safety
· Employee relations and key personnel risk
· Cyber and data risks
Directors' responsibility statement
This statement, which should be read in conjunction with the independent
review report by the auditors set out before the condensed consolidated
interim financial statements (the "interim financial statements"), is made to
enable shareholders to distinguish the respective responsibilities of the
Directors and the auditors in relation to the interim financial statements
which the Directors confirm have been presented on a going concern basis.
The Directors consider that the Group has used appropriate accounting
policies, consistently applied and supported by reasonable and appropriate
judgements and estimates. A copy of the interim financial statements of the
Group is placed on the website of Dar Global Plc: www.darglobal.co.uk
(https://are01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.darglobal.co.uk%2F&data=05%7C01%7Capaul%40darglobal.co.uk%7Cc5c2d36fc1a14fd1b43508db9d95d6ce%7C5a55e3feb87d4ae08579b46b9bb9148b%7C0%7C0%7C638277039105176496%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=TtRoB7EL3vjBYfN7eywCry1bkjdYoQSh46bxdx2Nedc%3D&reserved=0)
. The Directors are responsible for the maintenance and integrity of the
information on the website. Information published on the internet is
accessible in many countries with different legal requirements. Legislation in
the United Kingdom governing the preparation and dissemination of the
financial statements may differ from legislation in other jurisdictions.
The Directors confirm that this condensed set of interim financial statements
has been prepared in accordance with International Accounting Standard 34,
"Interim Financial Reporting", as adopted by the United Kingdom and that the
interim management report includes a fair review of the information required
by DTR 4.2.7R and DTR 4.2.8R, namely:
‒ an indication of important events that have occurred during the
first six months and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
‒ material related party transactions in the first six months of
the financial year.
On behalf of the Board
David Hunter
Chairman
26 September 2024
INDEPENDENT REVIEW REPORT TO DAR GLOBAL PLC
Conclusion
We have been engaged by DAR Global PLC (the "Company") to review the condensed
set of consolidated financial statements in the half-yearly financial report
for the six months ended 30 June 2024 of the Company and its subsidiaries
(together, the "Group"), which comprises the condensed statement of financial
position, the condensed statement of profit or loss and other comprehensive
income, the condensed statement of changes in equity, the condensed statement
of cash flows and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of consolidated financial statements in the
half-yearly financial report for the six months ended 30 June 2024 is not
prepared, in all material respects, in accordance with IAS 34 Interim
Financial Reporting and the Disclosure Guidance and Transparency Rules ("the
DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued by the Financial
Reporting Council for use in the UK. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. We read the other information contained in the half-yearly
financial report and consider whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
consolidated financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Scope of review section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However future events or conditions may cause the Group and
the Company to cease to continue as a going concern, and the above conclusions
are not a guarantee that the Group and the Company will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
interim financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2.1, the annual consolidated financial statements of
the Group are prepared in accordance with UK-adopted international accounting
standards. The directors are responsible for preparing the condensed set
of consolidated financial statements included in the half-yearly financial
report in accordance with IAS 34 Interim Financial Reporting.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Group and the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless they either intend to liquidate
the Group or the Company or to cease operations, or have no realistic
alternative but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of consolidated financial statements in the half-yearly financial report
based on our review. Our conclusion, including our conclusions relating to
going concern, are based on procedures that are less extensive than audit
procedures, as described in the scope of review paragraph of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement letter to assist the Company in meeting the requirements of the DTR
of the UK FCA. Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work,
for this report, or for the conclusions we have reached.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man
25 September 2024
Dar Global PLC and its subsidiaries
London - United Kingdom
Condensed consolidated statement of financial position
(In United States dollar)
June 30, December 31,
2024 2023
Note (Unaudited)
ASSETS
Cash and cash equivalents 5 325,103,201 228,492,034
Trade and unbilled receivables 6 249,050,084 221,867,464
Advances, deposits and other receivables 7 67,667,820 60,870,788
Development properties 8 265,799,367 216,931,211
Escrow retentions 9 10,360,336 9,987,477
Investment in joint venture 10 5,500,986 5,370,876
Loan to joint venture 11 2,136,963 2,150,987
Due from related parties 19 5,940,750 8,619,797
Property and equipment 12 22,718,915 5,536,049
Right-of-use assets 13 4,235,704 5,538,638
Deferred tax assets 20 5,117,080 1,980,741
--------------- ---------------
TOTAL ASSETS 963,631,206 767,346,062
========= =========
LIABILITIES AND EQUITY
LIABILITIES
Trade and other payables 14 34,659,527 25,713,890
Advances from customers 15 108,227,195 57,523,290
Retention payable 16 8,770,809 6,849,069
Development property liabilities 17 119,388,111 78,631,324
Loans and borrowings 18 234,022,604 125,363,803
Due to related party 19 1,089,166 1,248,415
Employees' end of service benefits 861,561 660,158
Lease liabilities 13 4,692,868 5,944,562
-
---------------- ----------------
TOTAL LIABILITIES 511,711,841 301,934,511
---------------- ----------------
EQUITY
Share capital 1,800,216 1,800,216
Share premium 88,781,078 88,781,078
Retained earnings 360,153,163 372,985,572
Foreign currency translation reserve 774,260 1,436,244
Statutory reserve 2.22 410,648 408,441
--------------- ---------------
TOTAL EQUITY 451,919,365 465,411,551
--------------- ---------------
TOTAL LIABILITIES AND EQUITY 963,631,206 767,346,062
========= =========
These condensed consolidated interim financial statements were approved by the
Board of Directors on 26 September 2024 and signed on its behalf by:
__________________ __________________
David Hunter
Ziad El Chaar
The accompanying notes from 1 to 34 form an integral part of these condensed
consolidated interim financial statements.
Dar Global PLC and its subsidiaries
London - United Kingdom
Condensed consolidated statement of profit or loss and other comprehensive
income
For the six months ended June 30 (In United States dollar)
2024 2023
Note (Unaudited) (Unaudited)
Revenue 21 44,454,982 108,419,405
Cost of revenue 21 (29,897,986) (62,698,442)
--------------- ---------------
Gross profit 14,556,996 45,720,963
Other (costs) / income 22 (995,096) 1,743,005
Selling and marketing expenses 23 (6,772,966) (13,185,382)
General and administrative expenses 24 (17,137,800) (12,928,893)
Finance costs 25 (11,698,584) (1,853,291)
Finance income 25 6,110,763 1,332,942
Share of loss from joint venture 10 (50,474) (31,553)
--------------- ---------------
(Loss) / profit before tax (15,987,161) 20,797,791
Income tax credit 20 3,154,752 -
--------------- ---------------
(Loss) / profit for the period (12,832,409) 20,797,791
========= =========
Other comprehensive income / (loss)
Items that are or may be classified subsequently to profit or loss
(Decrease) / increase in foreign currency translation reserve (659,777) 1,110,844
--------------- --------------
Total comprehensive (loss) / income for the period (13,492,186) 21,908,635
======== ========
(Loss) / profit attributable to:
Owners of the Company (12,832,409) 20,797,791
Non-controlling Interests - -
--------------- --------------
(12,832,409) 20,797,791
Total comprehensive (loss) / income attributable to: ========= ========
Owners of the Company (13,492,186) 21,908,635
Non-controlling Interests - -
--------------- --------------
(13,492,186) 21,908,635
========= ========
Loss / earnings per share attributable to owners of the Company:
- basic and diluted loss / earnings per share (USD) 26 (0.07) 0.12
--------------- --------------
Adjusted earnings before interest, tax, depreciation and amortisation
(adjusted EBITDA)
Net finance costs 5,587,821 520,349
Depreciation on property and equipment and right-of-use assets 2,137,564 1,172,123
Tax credit (3,154,752) -
------------- -------------
Adjusted earnings before interest, tax, depreciation and amortisation (8,261,776) 22,490,263
(adjusted EBITDA)
======== ========
The accompanying notes from 1 to 34 form an integral part of these condensed
consolidated interim financial statements.
Dar Global PLC and its subsidiaries
London - United Kingdom
Condensed consolidated statement of changes in equity
For the six months ended June 30, 2024 (In United States dollar)
Share capital Statutory reserve Foreign currency translation reserve Retained earnings Share premium Capital contribution Total equity
Balance as at January 1, 2023 (Unaudited) 22,395,109 - - - - 259,006,479 281,401,588
Profit for the period - - - 20,797,791 - - 20,797,791
Other comprehensive income - - 1,110,844 - - - 1,110,844
Total comprehensive income for the period - - 1,110,844 20,797,791 - - 21,908,635
Transaction with owners of the Company
Issue of shares related to acquisition of subsidiary 3,666,666 - - - 279,662,114 (259,006,479) 24,322,301
Issue of ordinary shares 216,216 - - - 71,783,588 - 71,999,804
Reduction of share capital (24,477,775) - - 287,142,399 (262,664,624) - -
Statutory reserve - 408,441 - (408,441) - - -
Total transactions with owners of the Company (20,594,893) 408,441 - 286,733,958 88,781,078 (259,006,479) 96,322,105
-------------- ------------ ------------ ---------------- -------------- -------------- ---------------
Balance as at June 30, 2023 (Unaudited) 1,800,216 408,441 1,110,844 307,531,749 88,781,078 - 399,632,328
======== ======= ======= ========= ======== ======== =========
Balance as at January 1, 2024 1,800,216 408,441 1,436,244 372,985,572 88,781,078 - 465,411,551
Loss for the period - - - (12,832,409) - - (12,832,409)
Other comprehensive income - - (659,777) - - - (659,777)
Total comprehensive income for the period - - (659,777) (12,832,409) - - (13,492,186)
Transaction with owners of the Company
Other reserves - 2,207 (2,207) - - - -
Total transactions with owners of the Company - 2,207 (2,207) - - - -
------------ ------------ ------------ ---------------- -------------- ----------- ---------------
Balance as at June 30, 2024 (Unaudited) 1,800,216 410,648 774,260 360,153,163 88,781,078 - 451,919,365
======= ======= ======= ========= ======== ====== =========
The accompanying notes from 1 to 34 form an integral part of these condensed
consolidated interim financial
statements.
Dar Global PLC and its subsidiaries
London - United Kingdom
Condensed consolidated statement of cash flows
For the six months ended June 30 (In United States dollar)
2024 2023
(Unaudited) (Unaudited)
Note
Cash flows from operating activities
(Loss) / profit for the period (12,832,409) 20,797,791
Adjustments for:
Depreciation on property and equipment 24 853,964 328,301
Depreciation on right-of-use assets 24 1,283,609 843,822
Provision for employees' end of service benefits 201,403 6,024
Finance costs 25 11,698,584 1,853,291
Finance income 25 (6,110,763) (1,332,942)
Share of loss from joint venture 10 50,474 31,553
Income tax credit (3,154,752) -
-------------- --------------
Operating (loss) / profit before working capital changes (8,009,890) 22,527,840
Working capital changes:
Trade and unbilled receivables (27,182,620) (73,303,643)
Advances, deposits and other receivables (6,797,032) (14,134,269)
Development properties (11,360,805) (1,654,287)
Trade and other payables 8,641,385 (6,370,972)
Advances from customers 50,703,905 44,550,929
Retention payable 1,921,740 372,737
Due to related party (159,249) -
Employees' end of service benefits paid - (21,476)
------------- ---------------
Net cash generated from / (used) in operating activities 7,757,434 (28,033,141)
------------- ---------------
Cash flows from investing activities
Acquisition of property and equipment (17,744,007) (1,904,329)
Escrow retentions (372,859) (1,578,917)
Funds received from a related party 2,679,047 (1,667,901)
Investment in joint venture - (447,472)
Interest income 25 5,895,161 1,332,942
-------------- --------------
Net cash used in investing activities (9,542,658) (4,265,677)
Cash flows from financing activities -------------- --------------
Proceeds from bank borrowings 18 108,406,871 2,224,527
Repayment of bank borrowings 18 (911,748) (8,167,613)
Interest expense on borrowings (2,403,733) (1,697,297)
Payment of structuring fees for loans and borrowings (4,709,101) -
Proceeds from initial public offerings - 71,999,804
Funds received from Major shareholder - 23,470,759
Payment towards principal portion of lease liabilities (1,246,152) (892,273)
Payment towards interest portion of lease liabilities (172,632) (155,993)
--------------- ---------------
Net cash generated from financing activities 98,963,505 86,781,914
--------------- ---------------
Net increase in cash and cash equivalents 97,178,281 54,483,096
Effect of translation of foreign currency (567,114) 1,229,917
Cash and cash equivalents at 1 January 228,492,034 112,612,385
--------------- ---------------
Cash and cash equivalents at 30 June 325,103,201 168,325,398
Cash and cash equivalents: --------------- ---------------
Cash in hand 39,202 21,516
Cash at banks 325,063,999 168,303,882
--------------- ---------------
325,103,201 168,325,398
========= =========
The accompanying notes from 1 to 34 form an integral part of these condensed
consolidated interim financial
statements.
1. Legal status and business activities
1.1 Dar Global PLC (the "Company") is a public limited company,
limited by shares, incorporated, domiciled, and registered in England and
Wales. The Company operates under a Company Number 14388348 issued by the
registrar of the companies for England and Wales. The majority of shares of
the Company are held by Dar Al Arkan Global Investment LLC ("Major
shareholder") in United Arab Emirates ("UAE") and the Ultimate parent company
of the Major shareholder is Dar Al Arkan Real Estate Development Company,
Kingdom of Saudi Arabia.
1.2 The registered address of the Company is located at 6(th)
Floor, 65 Gresham Street, London, EC2V 7NQ, United Kingdom.
1.3 These condensed consolidated interim financial statements ("interim
financial statements") represent the results of Dar Global PLC and its
subsidiaries (the "Group"), set out in note 1.4.
1.4 The Company has the following subsidiaries over which it has
direct or indirect control:
Name of subsidiary and domicile Percentage of effective holding Percentage of voting rights License / Registration No. Principal activities
Dar Al Arkan Properties L.L.C - UAE * 100% 100% Commercial license no. 791860 Development and sale of real estate.
Dar Al Arkan Global UK Holdings LTD - United Kingdom 100% 100% Company registration no. 13881707 Development and sale of real estate.
Dar Al Arkan Holding UK LTD - United Kingdom 100% 100% Company registration no. 14385758 General business activities
Dar Global UK No. 1 LTD - United Kingdom 100% 100% Company registration no. 14751868 Development and sale of real estate.
Dar Global UK No. 2 LTD - United Kingdom 100% 100% Company registration no. 14751750 Development and sale of real estate.
Dar Global UK No. 3 LTD - United Kingdom 100% 100% Company registration no. 14751915 Development and sale of real estate.
Dar Al Arkan Spain S.L. - Spain 100% 100% Company registration no. B09896390 Development and sale of real estate.
Dar Benahavis I, S.L. - Spain 100% 100% Company registration no. B72530843 Development and sale of real estate.
Daranavis S.L. - Spain 100% 100% Company registration no. B72530850 Development and sale of real estate.
Dar Tabano, S.L. - Spain 100% 100% Company registration no. B72530835 Development and sale of real estate.
M/s. Prime Real Estate D.o.o Sarajevo - Bosnia * 100% 100% Company registration no. 65-01-0672-17 Development and sale of real estate.
1.4 The Company has the following subsidiaries over which it has direct
or indirect control: (continued)
Name of subsidiary and domicile Percentage of effective holding Percentage of voting rights License / Registration No. Principal activities
M/s. Luxury Real Estate D.o.o. Sarajevo - Bosnia * 100% 100% Company registration no. 65-01-0698-17 Development and sale of real estate.
M/s. Dar Al Arkan Property Development D.o.o Sarajevo - Bosnia * 100% 100% Company registration no. 65-01-0676-17 Development and sale of real estate.
M/s. Beijing Dar Al Arkan Consulting Co. Ltd. * 100% 100% Company registration no. 91110105MA7 EQ79Y9Q Economic and trade consulting, Engineering consulting, business management
consulting, corporate planning, real estate information consulting,
undertaking exhibition activities, advertising design, production, agency and
release, development of real estate, technical consulting and technical
services, computer and graphic design.
Aqtab Properties L.L.C -UAE (Formerly Dar Al Arkan Global Property Development 100% 100% Commercial license no. 997901 Purchase and sale of real estate
L.L.C) *
Dar Al Arkan International Properties L.L.C - UAE * 100% 100% Commercial license no. 997919 Purchase and sale of real estate
Dar Al Arkan International Property Development L.L.C - UAE * 100% 100% Commercial license no. 997915 Purchase and sale of real estate
1.4 The Company has the following subsidiaries over which it has direct
or indirect control: (continued)
Name of subsidiary and domicile Percentage of effective holding Percentage of voting rights License / Registration No. Principal activities
Dar Al Arkan Property Development SPC - Oman 100% 100% Commercial license no. 1402786 Real estate development, Construction of buildings (general constructions of
residential and non-residential buildings
Dar Al Arkan Holdings Limited (ADGM) - UAE * 100% 100% Commercial license no. 000008662 Holding ownership of equity and non-equity assets, real property, intellectual
property and other tangible and intangible assets.
Dar Al Arkan Properties L.L.C - Branch Of Abu Dhabi 1 - UAE 100% 100% Commercial license no. CN-4765091 - Self-Owned property management services
- Real estate development construction
- Real estate purchase and sale brokerage.
Darglobal Maldives Private Limited - Maldives 100% 100% Commercial license no. C09392023 Owning, operating and managing tourist hotels and resorts.
Dar DG Global Investment L.L.C - UAE 100% 100% Commercial license no. 1215259 Investment in Commercial Enterprises & Management.
Dar Global Services Limited - UK 100% 100% Commercial license no. 15273295 Business support including marketing activities.
DG Luxury Property Management L.L.C - UAE 100% 100% Commercial license no. 1274015 Property management services.
Dar Al Arkan Global Holdings Real Estate Company - KSA 100% 100% Commercial license no. 1010924907 Development of projects and buying and selling of real estate.
1.4 The Company has the following subsidiaries over which it has direct
or indirect control: (continued)
Name of subsidiary and domicile Percentage of effective holding Percentage of voting rights License / Registration No. Principal activities
Dar Global USA LLC - USA 100% 100% Commercial license no. M23000008667 Investment in Commercial Enterprises & Management.
Dar Al Arkan Property Development LLC - Real Estate Rep. Office - UAE 100% 100% Commercial license no. 1143279 Real estate Representative Office.
Dar Global Centralized Services DMCC - UAE 100% 100% Commercial license no. DMCC198720 Project management services.
Dar Global Greece M.A.E - Greece ** 100% 100% Commercial license no. 175922001000 Sale of property.
Dar Global Morocco LLC - Morocco ** 100% 100% Commercial license no. 12673 Acquisition, development and sale of real estate properties, management and
administration of properties
Dar Global Real Estate Development LLC OPC - UAE ** 100% 100% Commercial license no. 59000 Land and real estate purchase and sale, self-owned property management
services, real estate enterprises investment, development, institution and
Management.
Dar Global Development Maldives Private LTD ** 100% 100% Commercial license no. C00212024 Owning, operating and managing tourist hotels and resorts.
* These entities became part of the group as on 25 January 2023 pursuant to
the acquisition of Dar Al Arkan Holdings Limited (ADGM) by the Company through
issuance of shares to the Major shareholder.
** These entities have been formed by the Group during the period 2024.
2 Material accounting policies
2.1 Statement of compliance
The interim financial statements have been prepared in accordance with the
principles of International Accounting Standard (IAS) 34 Interim Financial
Reporting as adopted for use in the UK and the Disclosure Guidance and
Transparency Rules ("the DTR") of the UK's Financial Conduct Authority. They
should be read in in conjunction with the Group's last annual consolidated
financial statements as at and for the year ended 31 December 2023 ('last
annual financial statements'). They do not include all the information
required for a complete set of financial statements prepared in accordance
with IFRS Accounting Standards. However, selected explanatory notes are
included to explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and performance
since the last annual financial statements.
All values are rounded to the nearest unit in United States dollar ("USD")
except where otherwise indicated. Each entity determines its own functional
currency and items included in the financial statements of each entity are
measured using that functional currency.
The interim financial statements have been prepared on a historical cost
basis. Historical cost is generally based on the fair value of the
consideration given in exchange for assets.
2.2 Basis of preparation
Basis of consolidation
The interim financial statements comprise the financial statements of the
Company and the subsidiaries ('the Group'), plus the Group's share of the
results and net assets of its joint ventures.
The financial information contained in these interim results does not
constitute full statutory accounts as defined in section 434 of the Companies
Act 2006.
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity. In assessing control, the Group takes into
consideration potential voting rights. The acquisition date is the date on
which control is transferred to the acquirer. The financial statements of
subsidiaries are included in the consolidated financial statements from the
date that control commences until the date that control ceases.
Joint ventures
A joint venture is a contract under which the Group and other parties
undertake an activity or invest in an entity, under joint control. The Group
uses equity accounting for such entities, carrying its investment at cost plus
the movement in the Group's share of net assets after acquisition, less
impairment.
Going concern
The Group's forecasts and projections based on the current trends in sales and
development and after taking account of the funds currently held, available
facility including the undrawn facility of USD 61 million at period end (note
18) show that the Company and the Group will be able to operate within the
level of resources.
The Directors have, at the time of approving the interim financial statements,
a reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Thus, they continue to adopt
the going concern basis of accounting in preparing these interim financial
statements.
Adoption of new and revised standards
The Group has adopted all relevant amendments to existing standards and
interpretations issued by the International Accounting Standard Board (IASB)
that are effective for the respective financial year / period ends presented,
with no material impact on its consolidated interim results or financial
position.
The Group did not implement the requirements of any other standards or
interpretations that were in issue but were not required to be adopted. No
other standards or interpretations have been issued that are expected to have
a material impact on these interim financial statements.
The preparation of the interim financial statements requires estimates and
assumptions to be made that may affect the amounts reported in the interim
financial statements and accompanying notes. Actual amounts could differ from
the estimates included in the interim financial statements herein. The
preparation of the interim financial statements on the basis set out, requires
the use of certain critical accounting estimates. It also requires judgement
to be exercised in the process of applying the accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are material to the interim financial statements,
are disclosed in note 2.22.
2.3 Fair value measurement
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place
either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous
market for the asset or liability.
The principal or the most advantageous market must be accessible to by the
Group.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their best economic interest.
A fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would
use the asset in its highest and best use.
2.4 Foreign currency
The transactions in currencies other than the Group's presentation currency
are recognized at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting period, monetary items denominated
in foreign currencies are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing at the date when the fair
value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognized in the consolidated
statement of profit or loss in the period in which they arise.
In preparing the separate financial information of the individual
subsidiaries, the transactions in currencies other than the subsidiaries
functional currency are recognized at the rates of exchange prevailing at the
dates of the transactions. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at
that date. Non-monetary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing at the date when
the fair value was determined. Non-monetary items that are measured in terms
of historical cost in a foreign currency are not retranslated. Any gain or
loss on translation from functional currency of subsidiaries to presentation
currency of the Group is taken to statement of other comprehensive income.
Foreign exchange differences
Exchange differences on monetary items are recognized in condensed
consolidated statement of profit or loss in the period in which they arise
except for exchange differences that relate to assets under construction for
future productive use. These are included in the cost of those assets when
they are regarded as an adjustment to interest costs on foreign currency
borrowings.
Foreign exchange gains and losses
The carrying amount of financial assets that are denominated in a foreign
currency is determined in that foreign currency and translated at the spot
rate at the end of each reporting period. Financial assets measured at
amortized cost, exchange differences are recognized in the condensed
consolidated statement of profit or loss.
2.5 Property and equipment
Property and equipment is stated at cost less accumulated depreciation and
identified impairment loss, if any. The cost comprises of purchase price,
together with any incidental expense of acquisition.
Subsequent costs are included in the asset's carrying amount or recognized as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and maintenance
expenses are charged to the statement of profit or loss during the financial
period in which they are incurred.
Depreciation is spread over its useful lives so as to write off the cost of
property and equipment, using the straight-line method over its useful lives
as follows:
Assets Life years
Leasehold improvements 3
Furniture and fixtures 3-5
Computers and office equipment 3-5
No depreciation is charged on land and capital work-in-progress.
When part of an item of property and equipment have different useful lives,
they are accounted for as separate items (major components) of property and
equipment.
The leasehold improvements are being depreciated over the period from when it
became available for use up to the end of the lease term.
The estimated useful lives, residual values and depreciation method are
reviewed at the end of each reporting period, with the effect of any changes
in estimate accounted for on a prospective basis.
The gain or loss arising on the disposal or retirement of an item of property
and equipment is determined as the difference between the sales proceeds and
the carrying amount of the asset and is recognized in the condensed
consolidated statement of profit or loss.
2.6 Leases
Leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
- Leases of low value assets; and
- Leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the
group's incremental borrowing rate on commencement of the lease is used.
Variable lease payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the initial
measurement of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments are
expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also
includes:
· amounts expected to be payable under any residual value guarantee;
· the exercise price of any purchase option granted in favour of the
group if it is reasonably certain to assess that option;
· any penalties payable for terminating the lease, if the term of the
lease has been estimated based on termination option being exercised.
Right of use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for:
· lease payments made at or before commencement of the lease;
· initial direct costs incurred; and
· the amount of any provision recognized where the group is
contractually required to dismantle, remove or restore the leased asset.
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease or over the remaining economic life
of the asset if, rarely, this is judged to be shorter than the lease term.
2.7 Development properties
Properties acquired, constructed or in the course of
construction for sale in the ordinary course of business are classified as
development properties and are stated at the lower of cost or net realizable
value. Cost includes cost of acquisition of land, cost of construction
including planning and design cost, commission, borrowing costs, employee
costs, cost of acquiring development rights and other direct costs
attributable to the development.
A significant portion of land plots, on which the Group's projects are
located, is acquired with minimal upfront cash contributions and certain
variable consideration based on the percentage of profit. The entire projects
are controlled and managed by the Group, which includes development,
marketing, collections etc.
Net realizable value is the estimated selling price in
the ordinary course of business, based on market prices at the reporting date
and discounted for the time value of money, if material, less costs to
completion and the estimated costs of sale.
The management reviews the carrying values of the
development properties on each reporting date.
2.8 Advances from customers
Advances received from customers include instalments received from customers
for properties sold either before the revenue recognition criteria have been
met or in excess of the project's stage of completion. These funds are later
recognized in the condensed consolidated statement of profit or loss once the
revenue recognition criteria are satisfied. Additionally, advances from
customers may be derecognized from the books when either the customer or the
Group terminates the contract.
2.9 Impairment of non-financial assets.
Non-financial assets of the Group mainly include development properties,
advances to suppliers and contractors, right-of-use assets and property and
equipment. At the end of each reporting period, the Group reviews the carrying
amounts of its non-financial assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).
Where it is not possible to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of the cash-generating unit
to which the asset belongs. Where a reasonable and consistent basis of
allocation can be identified, corporate assets are also allocated to
individual cash-generating units, or otherwise they are allocated to the
smallest group of cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognized immediately in the condensed consolidated statement of profit or
loss.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognized for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognized immediately in the condensed
consolidated statement of profit or loss.
2.10 Financial instruments
Financial assets and financial liabilities are recognized when the Group
becomes a party to the contractual provisions of the instrument.
2.11 Financial assets
Classification
The Group classifies its financial assets at amortized cost.
Measurement
At initial recognition, the Group measures a financial asset at its fair value
plus transaction costs that are directly attributable to the acquisition of
the financial asset.
Financial assets comprise of cash and cash equivalents, trade receivables,
advances deposits and other receivables, due from related parties and other
escrow retentions.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Trade and other receivables (including due from related parties)
Receivable balances that are held to collect are subsequently measured at the
lower of amortized cost or the present value of estimated future cash flows.
The present value of estimated future cash flows is determined through the use
of value adjustments for uncollectible amounts. The Group assesses on a
forward-looking basis the expected credit losses associated with its
receivables and adjusts the value to the expected collectible amounts.
Receivables are written off when they are deemed uncollectible because of
bankruptcy or other forms of receivership of the debtors. The assessment of
expected credit losses on receivables takes into account credit-risk
concentration, collective debt risk based on average historical losses,
specific circumstances such as serious adverse economic conditions in a
specific country or region and other forward-looking information.
For accounts receivable, the Group applies the simplified approach permitted
by IFRS 9, which requires expected lifetime losses to be recognized from
initial recognition of the receivables.
Derecognition of financial assets
The Group derecognizes a financial asset only when the contractual rights to
the cash flows from the asset expire; or it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another
Group. If the Group neither transfers nor retains substantially all the risks
and rewards of ownership and continues to control the transferred asset, the
Group recognizes its retained interest in the asset and an associated
liability for the amounts, it may have to pay. If the Group retains
substantially all the risks and rewards of ownership of a transferred
financial asset, the Group continues to recognize the financial asset.
2.12 Financial liabilities
Financial liabilities are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial
liability. All financial liabilities are recognized initially at fair value
and, in the case of loans, borrowings and payables, net of directly
attributable transaction costs.
The Group's financial liabilities include accounts payables and provisions,
other payables, development property liabilities, advance from customers and
due to related party.
Accounts and other payables
Accounts payable are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Accounts payable
are classified as current liabilities if payment is due within one year or
less (or in the normal operating cycle of the business if longer). If not,
they are presented as non-current liabilities. Accounts and other payables are
recognized initially at fair value and subsequently are measured at amortized
cost using effective interest method.
Loans and borrowings
Term loans are initially recognised at the fair value of the consideration
received less directly attributable transaction costs. After initial
recognition, interest-bearing loans and borrowings are subsequently measured
at amortised cost using the effective interest rate method. Gains and losses
are recognised in the condensed consolidated income statement when the
liabilities are derecognised as well as through the amortisation process.
Development property liabilities
Development property liabilities represents the amount payable for the
acquisition of development properties on a deferred payment plan basis
including variable consideration. Initially, these amounts are stated at the
fair value of the consideration payable. Subsequently, at each reporting date
the development property liabilities are measured at amortised cost.
Derecognition of financial liabilities
The Group derecognizes financial liabilities when, and only when, the Group's
obligations are discharged, cancelled or they expire. When an existing
financial liability is replaced by another, from the same lender on
substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognized in
the condensed consolidated statement of profit or loss.
Where the loan payable (or part thereof) is forgiven by a shareholder, the
loan is derecognised at its carrying value, and an equity contribution is
reflected at that same carrying value, this contribution is reflected as a
loss absorbed by a shareholder. No gain or loss is recognised in the condensed
consolidated statement of profit or loss.
2.13 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the
statement of financial position, when there is a legally enforceable right to
offset the recognized amounts and there is an intention to settle on a net
basis or realize the asset and settle the liability simultaneously.
2.14 Provisions
Provisions are recognized when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Group will
be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration
required to settle the present obligation at the end of the reporting period,
taking into account the risks and uncertainties surrounding the obligation.
When a provision is measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present value of those cash
flows.
When some or all of the economic benefits required to settle a provision are
expected to be recovered from a third party, a receivable is recognized as an
asset, if it is virtually certain that reimbursement will be received and the
amount of the receivable can be measured reliably.
2.15 Revenue recognition
Revenue from contracts with customers
The Group recognizes revenue from contracts with customers based on a
five-step model as set out in IFRS 15 Revenue from contracts with customers.
Step 1. Identify the contract(s) with a customer: A contract is defined as
an agreement between two or more parties that creates enforceable rights and
obligations and sets out the criteria for every contract that must be met.
This is evidenced by issuance of signed Sale and Purchase Agreement ("SPA") to
the customer and meeting specified threshold of project completion and
collection from the customers.
Step 2. Identify the performance obligations in the contract: A performance
obligation is a promise in a contract with a customer to transfer a good or
service to the customer. The performance obligation for the Group is to
deliver the constructed property to the customers along with the ancillary
rights such as the right to use amenities and other related infrastructure
facilities available. Accordingly, one performance obligation has been
identified for each unit to be sold. The group assesses its revenue
arrangements against specific criteria to determine if it is acting as
principal or agent. The Group has concluded that it is acting as a principal
in all of its revenue arrangements.
Step 3. Determine the transaction price: The transaction price is the
amount of consideration to which the Group expects to be entitled in exchange
for delivering the property to its customers. The agreed transaction price is
a part of signed SPA issued to each customer. Revenue excludes taxes and duty,
and includes an adjustment for a significant financing component ("SFC") as
the payment plan for the projects extends beyond twelve months from the
reporting period. No adjustment has been made for variable consideration as
the group does not have any contracts with variable consideration.
Step 4. Allocate the transaction price to the performance obligations in
the contract: The Group allocates the transaction price to each unit sold,
consistent with the performance obligation identified in Step 2.
Step 5. Recognize revenue when (or as) the entity satisfies a performance
obligation.
The Group satisfies a performance obligation and recognizes revenue over time,
if one of the following criteria is met:
1. The customer simultaneously receives and consumes the benefits
provided by the Group's performance as the Group performs; or
2. The Group's performance creates or enhances an asset
that the customer controls as the asset is created or enhanced; or
3. The Group's performance does not create an asset with
an alternative use to the Group and the entity has an enforceable right to
payment for performance completed to date.
The Group determines the satisfaction of performance obligation separately for
each of its contracts and recognize revenue accordingly.
For performance obligations where one of the above conditions are not met,
revenue is recognised at the point in time at which the performance obligation
is satisfied.
When the Group satisfies a performance obligation by delivering the promised
goods or services it creates a contract asset based on the amount of
consideration earned by the performance. Where the amount of consideration
received from a customer exceeds the amount of revenue recognized this gives
rise to a contract liability.
2.16 Cost of revenue
Cost of revenue represent cost for purchase of land, construction costs,
consultant costs, utilities cost, and other related direct costs recognized in
condensed consolidated statement of profit or loss on percentage of completion
or point in time as applicable.
2.17 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that necessarily take a
substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. Borrowing costs consist of
interest and other costs that the Group incurs in connection with the
borrowing of funds. All other borrowing costs are recognised in the condensed
consolidated statement of profit or loss in the period in which they are
incurred.
2.18 Escrow accounts
Escrow accounts represent bank accounts where money is held with the bank,
acting as an escrow agent, and available for use only if all the
pre-determined conditions are fulfilled. The funds paid by customers for their
apartments in off-plan sales are required to be deposited into escrow accounts
held by banks accredited by the local governing bodies.
For Escrow retention, in line with UAE laws an escrow agent must retain
five per cent. of the total value of each escrow account once the developer
obtains the building completion certificate to ensure coverage of defects in
the property post-handover. The retained amount will be released to the
developer one year from the registration of the residential units in the name
of purchasers of such units.
2.19 Equity and reserves
Share capital represents the nominal value of shares that have been issued.
Share premium represents the excess consideration received over the nominal
value of share capital upon the sale of shares, less any incidental costs of
issue.
The retained earnings represent distributable reserves.
The foreign currency translation reserve is used to record exchange difference
arising from translation of the financial statements of foreign subsidiaries,
associates and joint ventures.
2.20 Taxation
The tax charge represents the sum of the tax currently payable and deferred
tax.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable
income or loss for the period and any adjustment to the tax payable or
receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or
received that reflects uncertainty related to income taxes, if any. It is
measured using tax rates enacted or substantively enacted at the reporting
date. Current tax also includes any tax arising from dividends.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes.
Deferred tax is recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Deferred tax is not recognised
for:
- temporary differences on the initial recognition of assets or
liabilities in a transaction that:
a) is not a business combination; and
b) at the time of the transaction (i) affects neither accounting nor taxable
profit or loss and (ii) does not give rise to equal taxable and deductible
temporary differences;
- temporary differences related to investments in subsidiaries, associates
and joint arrangements to the extent that the Group is able to control the
timing of the reversal of the temporary differences and it is probable that
they will not reverse in the foreseeable future; and
- taxable temporary differences arising on the initial recognition of
goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits
and deductible temporary differences to the extent that it is probable that
future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant
taxable temporary differences. If the amount of taxable temporary differences
is insufficient to recognise a deferred tax asset in full, then future taxable
profits, adjusted for reversals of existing temporary differences, are
considered, based on the business plans for individual subsidiaries in the
Group. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will
be realised; such reductions are reversed when the probability of future
taxable profits improves.
The measurement of deferred tax reflects the tax consequences that would
follow from the manner in which the Group expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are
met.
2.21 Statutory reserve
According to Article 103 of the UAE Federal Law No. (32) of 2021, 5% of annual
net profits after NCI are allocated to the statutory reserve for the entities
registered in UAE. The transfers to the statutory reserve may be suspended
when the reserve reaches 50% of the paid-up capital.
2.22 Significant accounting judgements, estimates and assumptions
In the application of the Group's accounting policies, which are described in
policy notes, the management are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
The significant judgments and estimates made by management, that have a
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are described below.
Critical judgements in applying accounting policies
In the process of applying the Group's accounting policies, which are
described above, and due to the nature of operations, management makes the
following judgment that has the most significant effect on the amounts
recognized in the interim financial statements.
Identifying a contract
The group assesses for each development and for each customer the point in
time at which a contract exists. This requires assessing the point in each
development where there is certainty that it will continue to completion, as
well as assessing the point in time at which consideration from the customer
is probable - this assessment takes into account the legal requirements and
history of collections.
Timing of satisfaction of performance obligations
The Group is required to assess each of its contracts with customers to
determine whether performance obligations are satisfied over time in order to
determine the appropriate method of recognizing revenue. The Group has
assessed that based on the sale and purchase agreements entered into with
customers and the provisions of relevant laws and regulations, where contracts
are entered into to provide real estate assets to customer, the Group does not
create an asset with an alternative use to the Group and has an enforceable
right to payment for performance completed to date. In these circumstances the
Group recognizes revenue over time.
Measurement of progress when revenue is recognized over time
The Group has elected to apply the input method to measure the progress of
performance obligations where revenue is recognized over time. The Group
considers that the use of the input method which requires revenue recognition
on the basis of the Group's efforts to the satisfaction of the performance
obligation provides the best reference of revenue actually earned. In applying
the input method, the Group estimates the cost to complete the projects in
order to determine the amount of revenue to be recognized.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed below.
Impairment of financial assets
The loss allowances for financial assets are based on assumptions about risk
of default and expected loss rates. The Group uses judgement in making these
assumptions and selecting the inputs to the impairment calculation, based on
the Group's past history, existing market conditions as well as forward
looking estimates at the end of each reporting period. Details of the key
assumptions and inputs used are disclosed in the relevant notes to the interim
financial statements.
Determination of transaction prices
The Group is required to determine the transaction price in respect of each of
its contracts with customers. In making such judgment the Group assess the
impact of any variable consideration in the contract, due to discounts or
penalties, the existence of any significant financing component in the
contract and any non-cash consideration in the contract.
Cost to complete the projects
The Group estimates the cost to complete the projects in order to determine
the cost attributable to revenue being recognized. These estimates include the
cost of providing infrastructure, potential claims by contractors as evaluated
by the project consultant and the cost of meeting other contractual
obligations to the customers.
Net realisable value of development properties
Development properties are stated at the lower of cost and estimated net
realisable value. The cost of work-in-progress comprises construction costs
and other related direct costs. Net realisable value is the estimated selling
price in the ordinary course of business, less cost of completion and selling
expenses.
Contingent consideration payable for development property liabilities
For each acquisition of the land, the Group estimates the contingent
consideration payable (if any). In order to determine the contingent
consideration, the Group estimates the total sales price, the total cost of
development properties including potential claims by contractors and the
estimated cost of meeting other contractual obligations.
3 New standards and amendments
3.1 New standards and amendments applicable for 2024
The following standards and amendments apply for the first time to the
financial reporting periods commencing on or after January 1, 2024.
- Non-current liabilities with Covenants - Amendments to IAS 1
- Classification of Liabilities as Current or Noncurrent -
Amendments to IAS 1
- Lease liability in a Sale and Leaseback - Amendments to IFRS
16
- Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7
The management believes that the adoption of the above amendments effective
for the current accounting period has not had any material impact on the
recognition, measurement, presentation, and disclosure of items in the interim
financial statements.
4 Segment Information
Management monitors the operating results of its business segments separately
for the purpose of making decisions about resource allocation and performance
assessment. Segment performance is evaluated based on operating profit or loss
and is measured consistently with operating profit or loss in the interim
financial statements. The only segment is real estate development,
accordingly, the component parts of the revenue, profits or assets as
disclosed in the notes to the interim financial statement pertain to this
segment.
Business segment
The only business segment is Real estate development which represents 100% of
the revenue and total assets.
Geographic segments
The following tables include revenue and other segment information for the
period ended 30 June 2024 and 30 June 2023. Certain assets information for
geographic segments is presented as at 30 June 2024 and 31 December 2023.
The Group has divided its operations into two categories i.e. Domestic (UK)
and International (all other countries where Group has its operations)
Domestic International
USD USD
For the six months ended on 30 June 2024 (unaudited):
Revenue - 44,454,982
Loss for the period (3,066,449) (9,765,960)
For the six months ended on 30 June 2023 (unaudited):
Revenue - 108,419,405
Loss / profit for the period (2,537,728) 23,335,519
As at 30 June 2024 (unaudited)
Total assets 33,729,850 929,901,356
Total liabilities 11,557,172 500,154,669
As at 31 December 2023
Total assets 35,170,037 732,176,025
Total liabilities 2,386,588 299,547,923
a) Group has generated 100% of its revenue from its operations in United
Arab Emirates. The details of the Group's non-current assets categorized by
the subsidiary's country of domicile is as follows:
As at June As at December
30, 2024 31, 2023
---------------- ----------------
(Unaudited)
Non-current assets
United Arab Emirates 106,682,726 105,659,116
Other countries 21,126,028 6,626,542
---------------- ----------------
127,808,754 112,285,658
========= =========
5 Cash and cash equivalents
As at June As at December
30, 2024 31, 2023
---------------- ----------------
(Unaudited)
Cash in hand 39,202 24,785
Cash at bank
- Current accounts 27,326,811 12,815,812
- Escrow retention accounts (note (a) below) 10,360,336 9,987,477
- Escrow accounts (note (b) below) 198,241,400 148,308,559
- Demand deposit (note (c) below) 99,495,788 67,342,878
---------------- ----------------
335,463,537 238,479,511
Less: Escrow retention accounts (note 9) (10,360,336) (9,987,477)
---------------- ----------------
325,103,201 228,492,034
========= =========
a) The above represents Escrow retention accounts maintained with a
commercial bank in accordance with Law No. 8 of 2007 relating to Trust
Accounts Regulation and Real Estate Regulatory Authority (RERA) requirements
in Dubai - United Arab Emirates. The retention balance shall be released after
one year from the completion of the project. These balances carry interest at
the rate of 40 percent of 3 months EIBOR.
b) The above represents Escrow accounts maintained with commercial banks in
accordance with the local laws issued by the governing body of the respective
countries. These escrow accounts can be used for making payments directly
related to the projects subject to the regulations. The significant increase
in the balances during the period is mainly due to collections from customers
as per the payment plan.
c) The above represents deposit held with a bank in Kingdom of Saudi Arabia
rated at investment grade through one of its related parties (note 19) for the
period of three years at an interest rate of 7.80% per annum. This deposit is
repayable on demand without any penalty on early maturity.
Management has concluded that the Expected Credit Loss (ECL) for all bank
balances is immaterial as these balances are held with banks/financial
institutions whose credit risk rating by international rating agencies has
been assessed as low.
6 Trade and unbilled receivables
As at June As at December
30, 2024 31, 2023
---------------- ----------------
(Unaudited)
Unbilled receivables (note (a) below) 240,234,653 207,553,472
Trade receivables (note (b) below) 8,815,431 14,313,992
---------------- ----------------
249,050,084 221,867,464
Less: Provision for impairment on trade receivables - -
---------------- ----------------
Net receivables 249,050,084 221,867,464
========= =========
Not more than 12 months 155,951,480 139,199,058
More than 12 months 93,098,604 82,668,406
---------------- ----------------
249,050,084 221,867,464
========= =========
a) Unbilled receivables are contract assets which relate to the
Group's right to receive consideration for work completed but not billed as at
the reporting date. These are transferred to trade receivables when invoiced
as per milestones agreed in contracts with the customers.
b) At reporting date, the ageing analysis of net trade and
unbilled receivables is as follows:
As at June As At December
30, 2024 31, 2023
---------------- ----------------
(Unaudited)
Current (Not past due) 240,234,653 207,553,472
Not more than 90 days 750,278 7,749,411
Between 91 to 180 days 667,721 907,483
Between 181 to 360 days 3,316,640 4,229,881
More than 360 days 4,080,792 1,427,217
---------------- ----------------
Total 249,050,084 221,867,464
========= =========
7 Advances, deposits and other receivables
As at June As at December
30,2024 31,2023
---------------- ----------------
(Unaudited)
Prepayments (note (a) below) 35,128,332 33,100,762
Advances to suppliers and contractors 26,640,002 23,324,510
Margin deposit (note (b) below) 1,418,655 1,353,302
Other deposits 1,174,826 1,007,198
Other receivables 2,724,847 687,037
VAT receivable 581,158 1,397,979
-------------- --------------
67,667,820 60,870,788
======== ========
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Not more than 12 months 66,249,165 59,517,486
More than 12 months 1,418,655 1,353,302
-------------- --------------
67,667,820 60,870,788
======== ========
a) The above mainly includes incremental cost of obtaining a
contract such as sales commission paid to brokers and employees for the sale
of properties, amounting to USD 30,203,762 (2023: USD 27,685,694) and will be
amortized consistent with the pattern of revenue in the future.
b) The above represents margin deposits held with a bank
against project guarantee (note 30).
8 Development properties
As at June As at December
30, 2024 31,2023
--------------- ---------------
(Unaudited)
Balance at the beginning of the period 216,931,211 302,274,899
Additions during the period / year 79,548,997 130,052,699
Reclass to property and equipment (note 12) - (1,265,004)
Cost of revenue (29,897,986) (214,131,383)
Translation adjustments (782,855) -
--------------- ---------------
Balance at the end of the period / year 265,799,367 216,931,211
========= =========
Properties acquired, constructed or in the course of construction for sale in
the ordinary course of business are classified as development properties and
include the costs of:
· Freehold and leasehold rights for land;
· Amounts paid to contractors for construction including the cost of
construction of infrastructure; and
· Planning and design costs, costs of site preparation, professional
fees for legal services, property transfer taxes, borrowing costs, employee
costs, cost of acquiring development rights construction overheads and other
related costs.
Common overhead cost (directly attributable to the projects) is allocated to
various projects and forms part of the estimated cost to complete a project in
order to determine the cost attributable to revenue being recognised.
The Group assesses the net realizable value of development properties for
impairment on each reporting date and the management believes that the net
realizable value of above development properties is higher than their carrying
value as on the reporting date.
Development properties in the UAE include land acquired with minimal upfront
cash contributions and variable consideration. On initial recognition these
properties have been recognized at the fair value of the consideration payable
computed based on a deferred payment plan as defined in the sale and purchase
agreement ("SPA") (note 17). Under this arrangement, 50% of the profits from
the development on the land constitutes a variable contribution.
Development properties include an amount of USD 113,854,505 (December 2023:
USD 95,302,927) which is registered as primary mortgage in the favour of
commercial bank in Dubai and London against the borrowings (note 18).
The development properties are located in United Arab Emirates, United
Kingdom, Bosnia, Spain and Oman.
9 Escrow retentions
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Not more than 12 months 4,023,460 -
More than 12 months 6,336,876 9,987,477
-------------- --------------
Balance at the end of the period / year (note 5) 10,360,336 9,987,477
======== ========
10 Investment in joint venture
As at June As at December
30, 2024 31,2023
--------------- ---------------
(Unaudited)
Percentage of ownership interest 75.30% 75.30%
149 OPL Ltd 5,500,986 5,370,876
======== ========
On 3 November 2022, the Group entered into joint venture for the purpose of
acquiring, developing and selling the property under the name of 149 OPL Ltd
("joint venture") domiciled in the United Kingdom.
In accordance with the joint venture agreement, the Group and the other
investor have subscribed to deep discount bonds issued by 149 OPL Ltd in the
proportion of their respective ownership interest. The increase in value of
investment in joint venture is due to accrual of these interest income On 3
November 2022, the Group has subscribed for bonds with nominal value of USD
5,919,512 at a discounted price of USD 4,932,926. Further, the discount rate
is 10% per annum and maturity period for the bond is two years.
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Revenue - -
Net loss (67,031) (123,740)
Other comprehensive income - -
-------------- --------------
Total comprehensive loss (67,031) (123,740)
Group's share of loss (50,474) (93,162)
======== ========
The following table summarises the financial position of Group's joint venture
for the period / year ended:
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Total assets 26,724,566 25,077,273
Total liabilities (19,417,362) (17,942,847)
-------------- --------------
Net assets 7,307,204 7,134,426
Group's share of net asset 5,500,986 5,370,876
======== ========
11 Loan to joint venture
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
149 OPL Ltd 2,136,963 2,150,987
======== ========
Loan to joint venture is unsecured, repayable on demand and does not carry any
interest.
12 Property and equipment
Land Leasehold improvements Furniture and fixtures Computers and office equipment Capital work-in-progress Total
Cost
As at January 1, 2023 (unaudited) - - 43,153 237,835 576,016 857,004
Additions - 227,250 941,356 1,729,079 1,499,982 4,397,667
Transfer from Capital work-in-progress - 1,412,172 429,343 - (1,841,515) -
Reclass from development properties - - 590,872 674,132 1,265,004
-
Disposal - - - (10,223) - (10,223)
Translation adjustments - 6,524 19,068 300 - 25,892
---- ---------- ------------ ------------ ------------ ------------
As at December 31, 2023 - 1,645,946 1,432,920 2,547,863 908,615 6,535,344
---- ---------- ------------ ------------ ----------- ------------
As at January 1, 2024 - 1,645,946 1,432,920 2,547,863 908,615 6,535,344
Additions 16,587,428 95,347 35,460 887,080 442,944 18,048,259
Translation adjustments - (1,048) (13,707) (5,470) - (20,225)
------------- ------------ ------------ ------------ ------------ ------------
As at June 30, 2024 (unaudited) 16,587,428 1,740,245 1,454,673 3,429,473 1,351,559 24,563,378
------------- ------------ ------------ ------------ ----------- ------------
Accumulated depreciation
As at January 1, 2023 (unaudited) - - 5,425 9,448 - 14,873
Charge for the year - 192,693 268,456 523,309 - 984,458
Disposal - - - (173) - (173)
Translation adjustments - - - 137 - 137
---- ---------- ---------- ---------- ------------ ------------
As at December 31, 2023 - 192,693 273,881 532,721 - 999,295
---- ---------- ---------- ---------- ------------ ------------
As at January 1, 2024 - 192,693 273,881 532,721 - 999,295
Charge for the period - 300,458 144,867 408,639 - 853,964
Translation adjustments - (2,379) (2,387) (4,030) - (8,796)
---- ---------- ---------- ---------- ------------ ------------
As at June 30, 2024 - 490,772 416,361 937,330 - 1,844,463
---- ---------- ---------- ---------- ------------ ------------
Carrying value as
As at June 30, 2024 16,587,428 1,249,473 1,038,312 2,492,143 1,351,559 22,718,915
======== ====== ====== ====== ======= =======
As at December 31, 2023 - 1,453,253 1,159,039 2,015,142 908,615 5,536,049
======== ====== ====== ====== ======= =======
* The addition in land during the current period pertains to the acquisition
of land in the Maldives, along with associated costs. The Group's intention is
to develop and operate a branded hotel on this newly acquired land.
** The increase in capital work-in-progress during the current period includes
a provision of USD 304,252 (AED 1,117,366) related to a payment made by Dar Al
Arkan Properties LLC ("subsidiary") for the disputed invoice for a contractor
relating to Sales office. (notes 24 and 34).
13 Right-of-use assets and lease liabilities
The carrying amounts of the Group's right-of-use assets and lease liabilities
and the movements during the period/ year:
Right-of-use assets As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Balance at the beginning of the period / year 5,538,638 2,643,470
Additions during the period / year - 5,095,167
Depreciation charge for the period / year (1,283,609) (2,200,115)
Foreign exchange (loss) / gain (19,325) 116
-------------- --------------
Balance at the end of the period / year 4,235,704 5,538,638
======== ========
Lease liabilities As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Balance at the beginning of the period / year 5,944,562 2,743,815
Additions during the period / year - 5,095,167
Interest expense for the period / year 172,632 376,587
Payments for the period / year (1,418,784) (2,274,801)
Foreign exchange (loss) / gain (5,542) 3,794
------------ ------------
Balance at the end of the period / year 4,692,868 5,944,562
======= =======
Not more than 12 months 2,347,739 2,597,561
More than 12 months 2,345,129 3,347,001
------------ ------------
4,692,868 5,944,562
======= =======
14 Trade and other payables
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Trade payables 4,082,900 3,050,477
Accruals and provisions* 30,576,627 22,533,630
Other payables - 129,783
-------------- --------------
34,659,527 25,713,890
======== ========
Not more than 12 months 34,659,527 25,713,890
======== ========
*The above includes a provision of USD 326,980 (AED 1,200,833) for the
execution of a case filed by a contractor (notes 12, 24 and 34).
15 Advances from customers
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Balance at the beginning of the period / year 57,523,290 94,456,096
Revenue recognized during the period / year (18,294,187) (137,692,637)
Advances received from the customers during the period / year - Net
68,998,092 100,759,831
--------------- ---------------
Balance at the end of the period / year 108,227,195 57,523,290
========= =========
The above represent contractual liabilities arising from the property sales
agreement with the customers including advance consideration received from
them.
The aggregate amount of the sale price allocated to the performance
obligations of the Group that are fully or partially unsatisfied as at 30 June
2024 is USD 132,558,583 (2023: USD 165,477,358). The Group expects to
recognise these unsatisfied performance obligations as revenue over a period
of 1 to 5 years.
16 Retention payable
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Retention payable for construction works - not more than 12 months 3,753,313 2,956,238
Retention payable for construction works - more than 12 months
5,017,496 3,892,831
------------ ------------
8,770,809 6,849,069
======= =======
17 Development property liabilities
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Long term liability - Land 119,388,111 78,631,324
-------------- --------------
119,388,111 78,631,324
======== ========
The above represents amount payable for the land acquired. These liabilities
are secured against development properties (note 8). The properties have been
purchased on a deferred payment plan with the final instalment due on the
completion of the projects. The above liabilities have been discounted at a
rate of 7.5% to 8.5%.
There was an acquisition of land in the period on 18 March 2024 in the amount
of USD 37,492,619 which resulted in an increase to the development property
liability.
18 Loans and borrowings
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Balance at the beginning of the period / year 128,019,785 69,668,662
Add: Drawdown during the period / year 108,406,871 77,234,071
Less: Repayments during the period / year (911,748) (18,882,948)
--------------- ---------------
Total borrowings 235,514,908 128,019,785
Less: Unamortised cost (1,492,304) (2,655,982)
--------------- ---------------
234,022,604 125,363,803
========= =========
Loans and borrowings maturity profile: As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Not more than 12 months 74,164,146 17,699,115
More than 12 months 159,858,458 107,664,688
-------------- --------------
234,022,604 125,363,803
======== ========
The Group has following secured interest-bearing borrowings:
- On 17 May 2024, the Group has obtained financing facility of USD
18,397,592 (GBP 14,547,000) from a commercial bank in London of which the
Group had drawn down USD 10,275,688 (GBP 8,125,000). This facility is secured
against development property (note 8) in the United Kingdom, and carries
interest at Sonia rate plus 2.25% per annum, and is repayable by May 2026.
- On 26 May 2023, the Group had obtained financing facility of USD
204,220,558 (AED 750,000,000) from a commercial bank in UAE which is
guaranteed by majority shareholder and Ultimate parent company of majority
shareholder with a contractual maturity by July 2027 repayable in half yearly
instalments. The facility carries an interest rate of 3 months EIBOR plus
2.30% per annum.
During the year 2023, the Group had drawn USD 68,073,520 (AED 250,000,000).
Further, during the current period, the Group has drawn USD 92,579,986 (AED
340,000,000).
The amount of undrawn facility as at 30 June 2024 is USD 43,567,052 (AED
160,000,000).
- During the year 2022, the Group entered into a financing facility
with a commercial bank for an amount of USD 87,134,105 (AED 320,000,000) of
which the Group had drawn down USD 77,673,031 (AED 285,254,207). This facility
is secured against development property (note 8) in United Arab Emirates,
carries interest at 3 months EIBOR plus 2.55% per annum and is repayable by
November 2027.
The facility is presented in the interim financial statements at USD
64,585,713.
19 Related party transactions
The Group enters into transactions with other entities that fall within the
definition of a related party as contained in IAS 24, Related party
disclosures. Related parties comprise entities under common ownership and/or
common management and control; their partners and key management personnel.
The management decides on the terms and conditions of the transactions and
services received/rendered from/to related parties as well as other charges,
if applicable.
a) Due from related parties
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Entity under common control
Dar Al Arkan For Real Estate Development W.L.L, Qatar 5,856,357 7,201,786
Dar (Beijing) International Holdings Co. Ltd., China 68,558 25,886
Quara Holding, UAE 15,835 1,392,125
------------- -------------
5,940,750 8,619,797
======== ========
These balances are unsecured, interest free and are repayable on demand.
b) Due to related party
As at June As at December
30, 2024 31,2023
---------------- ----------------
(Unaudited)
Major shareholder
Dar Al Arkan Global Investment LLC, UAE 1,089,166 1,248,415
======== ========
These balances are unsecured, interest free and are repayable on demand.
c) Transactions with key management personnel
As at June As at June
30, 2024 30,2023
---------------- ----------------
(Unaudited) (Unaudited)
Short term benefits 1,395,173 1,386,312
Employees' end-of-service benefits 249,341 216,953
Board of directors' fees 546,589 259,167
------------ ------------
2,191,103 1,862,432
======= =======
d) Other related party transactions
As at June As at June
30,2024 30,2023
---------------- ----------------
(Unaudited) (Unaudited)
Issuance of shares for acquisition of subsidiary
Major shareholder - 282,670,733
Issuance and redemption of preference shares
Major shareholder - 61,900
Inter-group transactions
Entity under common control of Ultimate parent company of Major shareholder 1,302,757 (1,667,901)
Major shareholder** (159,249) (594,842)
Deposits*
Entity under common control 32,152,910 -
Share of loss
Joint venture 50,474 31,553
Interest income
Entity under common control of Ultimate parent company of Major shareholder - 303,166
Joint venture - 258,274
Professional fees
Ultimate parent company of Major shareholder - 81,688
Prepayments
Entity under common control of Ultimate parent company of Major shareholder - 73,997
During 2023, the Group entered into a revolving credit agreement of USD 200
million with the Ultimate parent company of the Major shareholder to finance
the general corporate purposes of the Group. The amount is fully undrawn as at
30 June 2024 and the terms and conditions of any drawdown will be agreed when
they occur.
* During the period, the Group made additional deposits with a bank in the
Kingdom of Saudi Arabia rated at investment grade through one of its related
parties amounting to USD 32,152,910 (note 5).
** These transactions with Major shareholder include payments made of behalf
of them.
20 Income taxes
Income tax expense represents the sum of current income tax and deferred tax.
Current income tax assets and liabilities for the current and prior periods
are measured at the amount expected to be recovered from or paid to the
taxation authorities.
The Group recognizes deferred tax assets only to the extent that it is
probable that future taxable profit will be available against which the
deductible temporary differences and carried forward tax losses can be
utilised.
Deferred tax assets and liabilities are measured on an undiscounted basis at
the tax rates that are expected to apply when the asset is realised or the
liability is settled, based on tax rates and tax laws enacted or substantively
enacted at the balance sheet date.
As a result, deferred tax assets with a carrying value of USD 3,154,752 (June
2023: nil) were recognised during the period. The deferred tax assets relate
to unused accumulated losses that the Group believes are recoverable against
future forecasted taxable profit expected to be generated from the ongoing
projects.
21 Revenue
For the six months ended
June 30, June 30,
2024 2023
---------------- ----------------
(Unaudited) (Unaudited)
Revenue is recognised over time as provided below:
Sale of residential units 44,454,982 108,419,405
========= =========
Cost of revenue
Cost of residential units (29,897,986) (62,698,442)
========= ========
Revenue from sale of residential units is net of discount against transaction
prices for certain units sold with a significant financing component amounting
to USD 3,405,894 (2023: USD 5,906,542).
22 Other income / (costs)
For the six months ended
June 30, June 30,
2024 2023
---------------- ----------------
(Unaudited) (Unaudited)
Income from termination of units (note (a) below) 72,022 1,057,294
Foreign exchange (loss) / gain (1,145,146) 668,350
Others 78,028 17,361
---------- -------------
(995,096) 1,743,005
====== =======
(a) This represents instalments collected from customers that have been
forfeited due to termination of contracts on account of cancellation of units
booked.
23 Selling and marketing expenses
For the six months ended
June 30, June 30,
2024 2023
---------------- ----------------
(Unaudited) (Unaudited)
Sales commission 4,185,001 10,119,319
Marketing expenses 2,587,965 3,066,063
-------------- --------------
6,772,966 13,185,382
======== ========
24 General and administrative expenses
For the six months ended
June 30, June 30,
2024 2023
---------------- ----------------
(Unaudited) (Unaudited)
Salaries and related benefits 10,609,997 7,358,332
Legal and professional expenses* 1,674,333 1,645,372
Depreciation on right-of-use assets (note 13) 1,283,609 843,822
IT related expenses 774,224 518,061
Bank charges 206,479 333,738
Utilities 324,141 361,049
Depreciation on property and equipment (note 12) 853,964 328,300
Rent 92,195 311,429
Board of Directors Fees 384,657 259,167
Travelling expenses 310,234 257,262
Other expenses 623,967 712,361
-------------- --------------
17,137,800 12,928,893
======== ========
* Legal and professional fees include a provision of USD 22,727 (AED 83,467)
for court fees associated with the execution of a case filed by the contractor
(notes 12 and 34).
25 Net finance costs
For the six months ended
June 30, June 30,
2024 2023
---------------- ----------------
(Unaudited) (Unaudited)
Finance costs
Interest expense - 11,525,952 1,697,297
Interest on lease liability (note 13) 172,632 155,994
-------------- ------------
11,698,584 1,853,291
======== =======
Finance income
Interest income (5,895,161) (771,502)
Income from investment in bonds of joint venture (215,602) (258,274)
Interest income from loan to related party (note 19) - (303,166)
-------------- --------------
(6,110,763) (1,332,942)
======== ========
Net finance costs 5,587,821 520,349
======== ========
26 Earning per share
Basic earnings per share amounts are calculated by dividing net profit or loss
for the period attributable to the owners of the Company by the weighted
average number of ordinary shares outstanding during the period.
Diluted earnings per share amounts are calculated by dividing the net profit
or loss attributable to the owners of the Company by the weighted average
number of ordinary shares outstanding during the period plus the weighted
average number of ordinary shares that would be issued on conversion of all
the dilutive potential ordinary shares into ordinary shares. The Company has
no dilutive instruments in issue.
The information necessary to calculate basic and diluted earnings per share is
as follows:
For the six months ended
June 30, June 30,
2024 2023
---------------- ----------------
(Unaudited) (Unaudited)
Earnings:
(Loss) / profit attributable to the owners of the Company for basic / diluted (12,832,409) 20,797,791
loss / earnings
======== ========
Number of shares
Weighted-average number of ordinary shares for basic / diluted earnings per 180,021,612 180,021,612
share*
========= =========
Earnings per share:
- basic and diluted loss / earnings per share (USD) (0.07) 0.12
======== ========
*Weighted average number is adjusted retrospectively for June 2023.
27 Financial instruments
a) Material accounting policies
Details of the material accounting policies and methods adopted, including the
criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognized, in respect of each class of financial
asset and financial liability are disclosed in note 2 to the interim financial
statements.
b) The Group considers that the carrying amount of financial assets and
liabilities are reasonable approximation of fair values.
As at June As at December 31, 2023
30, 2024
Financial assets
Cash and cash equivalents 325,103,201 228,492,034
Trade and unbilled receivables 249,050,084 221,867,464
Advances, deposits and other receivables 5,318,328 3,047,537
Escrow retentions 10,360,336 9,987,477
Due from related parties 5,940,750 8,619,797
Loan to joint venture 2,136,963 2,150,987
--------------- ---------------
597,909,662 474,165,296
========= =========
Financial liabilities
Trade and other payables 34,659,527 25,713,890
Retention payable 8,770,809 6,849,069
Loans and borrowings 234,022,604 125,363,803
Development property liabilities 119,388,111 78,631,324
Due to related party 1,089,166 1,248,415
Lease liabilities 4,692,868 5,944,562
--------------- ---------------
402,623,085 243,751,063
========= =========
Financial instruments comprise of financial assets and financial liabilities.
Financial assets consist of accounts receivable, cash and cash equivalents,
due from related parties, loan to joint venture and other receivables
excluding prepayments, advances to suppliers and contractors and VAT
refundable. Financial liabilities consist of other payables, loans and
borrowings, development property liabilities, lease liabilities and accounts
payables and provisions.
28 Financial risk management objectives
The Group management set out the Group's overall business strategies and its
risk management philosophy. The Group's overall financial risk management
program seeks to minimize potential adverse effects on the financial
performance of the Group. The Group policies include financial risk management
policies covering specific areas, such as market risk (including foreign
exchange risk, interest rate risk), liquidity risk and credit risk. Periodic
reviews are undertaken to ensure that the Group's policy guidelines are
complied with.
There has been no change to the Group's exposure to these financial risks or
the manner in which it manages and measures the risk.
The Group is exposed to the following risks related to financial instruments.
The Group has not framed formal risk management policies, however, the risks
are monitored by management on a continuous basis. The Group does not enter
into or trade in financial instruments, investment in securities, including
derivative financial instruments, for speculative or risk management purposes.
a) Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies.
Hence, exposures to exchange rate fluctuations arise. The summarized
quantitative data about the Group's exposure to currency risk as reported to
the management of the Group is as follow:
EUR GBP BAM CNY
June 30, 2024 (Unaudited)
Cash and cash equivalents 7,321,355 2,209,245 247,359 22,818
Other financial assets 14,754 2,380,920 - -
Financial liabilities (395,535) (11,231,768) (23,114) -
------------ ------------ --------- ---------
6,940,574 (6,641,603) 224,245 22,818
======= ======= ===== =====
( )
December 31, 2023
Cash and cash equivalents 5,910,324 1,885,534 30,734 -
Other financial statement 892,563 3,991,989 - -
Financial liabilities (359,745) (1,337,715) (82,953) -
( ) -------------- --------------- -------------- ------------
6,443,142 4,539,808 (52,219) -
======== ========= ======== =======
The following table details how the Group's sensitivity to a 1000 basis points
increase or decrease in USD against the relevant foreign currencies would have
affected the measurement of financial instruments denominated in foreign
currency and affected equity and profit or loss by the amounts shown below.
June 30, December 31,
2024 2023
---------------- ----------------
(Unaudited)
EUR 694,057 644,314
GBP (664,160) 453,980
BAM 22,425 (5,221)
CNY 2,282 -
--------- ----------
54,604 1,093,073
===== ======
The Group's significant monetary assets and liabilities denominated in foreign
currencies are in AED which is pegged to USD. As the AED is currently pegged
to the USD, balances are not considered to represent significant currency
risk.
b) Interest rate sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to
interest rates for non-derivative financial instruments as at June 30, 2024.
The analysis is prepared assuming the amount of liabilities outstanding at the
reporting date was outstanding for the whole period.
The interest rate profile of the Group's interest-bearing financial
instruments as reported to the management of the Group is as follows:
June 30, December 31,
2024 2023
---------------- ----------------
(Unaudited)
Fixed rate instruments
Financial assets 99,495,788 74,544,664
( ) -------------- --------------
( ) 99,495,788 74,544,664
( ) ======== ========
Variable rate instruments ( ) ( )
Financial assets 235,949,821 172,465,150
Financial liabilities (234,022,604) (125,363,803)
---------------- ---------------
1,927,217 47,101,347
========= =========
A 50-basis point increase or decrease is used when reporting interest rate
risk internally to key management personnel and represents management's
assessment of the reasonably possible change in interest rates.
If interest rates had been 50 basis points higher / lower and all other
variables were held constant, the change in Group's loss for the period ended
June 30, 2024 would be USD 10,098 (2023: USD 235,507). This is mainly
attributable to the Group's exposure to variable rate financial instruments.
c) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the
management which has built an appropriate liquidity risk management framework
for the management of the Group's short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by
maintaining adequate reserves, continuously monitoring forecast and actual
cash flows and matching the maturity profiles of financial assets and
liabilities.
The Group's objective is to maintain a balance between continuity of funding
and flexibility through the use of bank overdrafts, bank loans and equity from
shareholders.
The table below summarizes the maturity profile of the Group's financial
liabilities. The contractual maturities of the financial liabilities have been
determined on the basis of the remaining period at reporting date to the
contractual maturity date. The maturity profile of these liabilities at the
reporting date based on contractual repayment arrangements are shown in the
table below:
30 June 2024 Carrying amount Total Less than 1-2 years 2-5 years
1 year
Payables 34,659,527 (34,659,527) (34,659,527) - -
Retention payable 8,770,809 (8,770,809) (3,753,313) (4,353,091) (664,405)
Loans and borrowings 234,022,604 (255,883,575) (74,164,146) (30,118,255) (151,601,174)
Development property liabilities 119,388,111 (144,519,634) - (92,579,986) (51,939,648)
Lease liabilities 4,692,868 (4,949,277) (2,476,015) (1,895,398) (577,864)
Due to related party 1,089,166 (1,089,166) (1,089,166) - -
--------------- ----------------- ----------------- ---------------- ----------------
402,623,085 (449,871,988) (116,142,167) (128,946,730) (204,783,091)
======== ========= ========= ======== =========
31 December 2023
Payables 25,713,890 (25,713,890) (25,713,890) - -
Retention payable 6,849,069 (6,849,069) (2,956,238) (3,184,957) (707,874)
Loans and borrowings 125,363,803 (154,130,558) (28,517,099) (41,101,308) (84,512,151)
Development property liabilities 78,631,324 (92,579,986) - - (92,579,986)
Lease liabilities 5,944,562 (6,390,540) (2,792,437) (2,280,731) (1,317,372)
Due to related party 1,248,415 (1,248,415) (1,248,415) - -
--------------- --------------- --------------- --------------- ----------------
243,751,063 (286,912,458) (61,228,079) (46,566,996) (179,117,383)
======== ======== ======== ======== =========
c) Credit risk management
Credit risk refers to the risk that the counterparty will default
on its contractual obligations resulting in financial loss to the Group. The
Group has adopted a policy of only dealing with creditworthy counterparties.
The Group's exposures are continuously monitored and their credit exposure is
reviewed by the management regularly.
The credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by international
credit-rating agencies.
The carrying amounts of the financial assets recorded
in the interim financial statements, which is net of impairment losses,
represents the Group's maximum exposure to credit risks. The Group considers
that the risk of loss related to unbilled receivables and trade receivables is
remote due to collateral held against such amounts due, being residential
property developed by the Group.
29 Capital risk management
The capital structure of the Group consists of cash and cash equivalents,
debt, which includes interest-bearing loans and borrowings as disclosed in
note 18 and equity as disclosed in the consolidated financial statements.
The Group manages its capital to ensure that it will be able to continue as a
going concern while maximizing the return to stakeholders through the
optimization of the equity balance. The Group's overall strategy remains
unchanged from prior year. The Group is not subject to any externally imposed
capital requirements.
The Group monitors capital using 'net debt' to 'equity'. Net debt is
calculated as total liabilities (as shown in the condensed consolidated
interim statement of financial position) less cash and cash equivalents.
Equity comprises all components of equity.
The Group's policy is to keep the ratio below 1. The Group's net debt to
equity ratio was as follows.
June 30, December 31,
2024 2023
---------------- ----------------
(Unaudited)
Total liabilities 511,711,841 301,934,511
Less: Cash and cash equivalents (325,103,201) (228,492,034)
-------------- --------------
Net debt 186,608,640 73,442,477
-------------- --------------
Total equity 451,919,365 465,411,551
-------------- --------------
Net debt to equity ratio 0.41 0.16
30 Contingent liabilities
As at June As at December
30, 2024 31, 2023
---------------- ----------------
(Unaudited)
Letters of guarantee (note (a) below) 3,866,575 3,866,575
======== ========
(a) Under the Real Estate Regulatory Agency (RERA) regulations, the Group is
required to provide letters of guarantees to the Dubai Land Department for all
of its projects located in the United Arab Emirates in the amount of 20 per
cent. of the construction costs for such projects. The Group holds margin
deposits against the letters of guarantee at the bank providing such letters
of guarantee. The guarantee margin deposit is refundable on completion of the
project.
Except for the above and ongoing business obligations which are under normal
course of business, there has been no other known contingent liability on
Group's interim financial statements as of reporting date.
31 Commitments
As at June 30, As at December 31,
2024 2023
---------------- ----------------
(Unaudited)
Contracted commitments for development properties 99,237,684 102,250,823
(note 8)
========= =========
Except for the above commitments which are for construction works on ongoing
projects and ongoing business obligations which are under normal course of
business, there has been no other known commitment on Group's interim
financial statements as of reporting date. These commitments will be funded
from Group's existing funds or undrawn loans and borrowings facilities.
32 Staff number and costs
For the six months ended
June 30 June 30,
2024 2023
---------------- ----------------
(Unaudited) (Unaudited)
The average number of employees employed by the Group 259 207
========= =========
The payroll cost for these employees is as follows:
- Wages and salaries 10,609,997 7,358,332
========= =========
33 Auditors Remuneration
For the six months ended
June 30, June 30,
2024 2023
---------------- ----------------
(Unaudited) (Unaudited)
Audit of condensed consolidated interim financial statements 113,823 133,665
---------- ----------
113,823 133,665
====== ======
34 Events after the reporting date
In July 2024, a subsidiary of the Group, was required to make a payment of USD
326,980 (AED 1,200,833) for the execution of a case filed by one of its
contractors. The payment includes USD 304,252 (AED 1,117,366) for principal
and interest, with the remaining amount covering court fees. The adjustment
has been reflected in these interim financial statements (notes 12 and 24).
Alternative performance measures
The Group uses a number of alternative performance measures (APM) which are
not defined within IFRS Accounting Standards. The Directors use the APMs,
along with IFRS measures to assess the operational performance of the Group.
Definitions and reconciliations of the financial APMs used compared to IFRS
measures, are included below:
Performance metrics
Performance metrics reconciled to statutory reported measures are shown below.
The Directors consider these performance metrics provide additional
information regarding the Group's core operations and business performance
(In US$)
Particulars January 1, 2024 to June 30, 2024 January 1, 2023 to June 30, 2023
Revenue 44,454,982 108,419,405
Gross profit 14,556,996 45,720,963
Gross profit % 33% 42%
(Loss) / profit for the period before tax (15,987,161) 20,797,791
(Loss) / profit for the period % of revenue - 36% 19%
1 Excludes escrow retention of US$ 10.4 million for HY 2024 (FY 2023: US$
10.0 million)
2 UAE Real Estate Market Review Q2 2024, CBRE Research July 2024.
3 Sultanate of Oman - H1 2024 Market Overview, Hamptons International
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR KZGZLNKVGDZMRecent news on Dar Global
See all newsREG - Dar Global PLC - Publication of Annual Report and Notice of AGM
AnnouncementREG - Dar Global PLC - Investments in Saudi Arabia for US$390 million
AnnouncementREG - Dar Global PLC - Full-year results for the year ended 31 Dec 2024
AnnouncementRCS - Dar Global PLC - 2024 Development Update
AnnouncementRCS - Dar Global PLC - Trump Jeddah Launch
Announcement